SDE+ grants: latest developments

19 Apr '19

Introduction

With the Stimulation of Sustainable Energy Production regulation (Stimulering Duurzame Energieproductie, SDE+) the Dutch government makes billions of euros available for renewable energy projects. This SDE+ programme is developing quickly in order to keep up with social and technical developments. In 2018, projects with a temporary environmental permit were excluded from the SDE+ programme. In 2019, the total amount of SDE+ grants to be granted was decreased. And as per 2020, the SDE+ programme can also be used to encourage the avoidance of CO2. This article provides an overview of the most important developments in relation to the SDE+ grant.

Review SDE+ 2018

The Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland, RVO) indicated that there was a lot of interest in the SDE+ grant in 2018. The majority of the applications (based on their numbers and budget) consists of solar PV-projects. Based on the estimated annual production, the volumes of solar PV-applications and wind on land-applications are quite similar. During the spring application round of 2018, 3,889 projects have been granted a positive grant decision (subsidiebeschikking) with an accompanied obligations budget (verplichtingenbudget) of 3.6 billion euro. During the autumn application round, a total amount of 5,907 applications have been submitted with a budget claim of more than 7.7 billion euro against the available budget of 6 billion euro. At the beginning of March, RVO had processed 75% of the applications and it is currently evaluating the remaining applications.

Final correction amounts 2018

On Friday 29 March 2019, the final correction amounts for 2018 have been published in the Government Gazette (Staatscourant). The final SDE+ grant amounts for the year 2018 will be calculated on the basis of these correction amounts.

Grants based on temporary environmental permits

We previously indicated that the Dutch Minister of Economic Affairs and Climate (Minister van Economische Zaken en Klimaat) included (late 2018) a new provision in the execution regulation (uitvoeringsregeling) of the SDE+ stating that it will no longer be possible to apply for an SDE+ grant for projects on the basis of the “kruimellijst” with a temporary environmental permit for such projects. According to the Minister, it is important that a project already has an environmental permit for at least the duration of the project in order to enable a timely delivery of the project and a more cost-efficient use of grants. Late November 2018, the Minister has further elaborated on this decision in response to parliamentary questions (kamervragen). According to the Minister, temporary environmental permits with a duration of ten years or less will provide a problem for the economic feasibility. SDE+ is based on a term of 15 years for a profitable business case. The Minister indicated that during the spring application round of 2018, applications have already been denied due to the fact that a profitable business case was not possible during the period for which a temporary environmental permit would be granted. This concerned approximately 20 of the more than 4,000 applications for solar PV. We understand that in at least six of these cases, this decision has been appealed. The hearings took place at the CBb (College van Beroep voor het bedrijfsleven) early April 2019. We will keep you updated in relation to the outcome of these proceedings.

Design SDE+ programme 2019

In December 2018, the Minister has informed parliament about the design of the SDE+ programme for 2019. The total grant amount has been adjusted from 12 billion euro in 2018 to 10 billion euro in 2019 due to “the correlation between potential projects and available obligations budget”. Below, I will discuss some remarkable amendments for certain categories of renewable energy:

  • Solar: the amendments for solar PV are the most striking. The standard amounts for solar PV are decreased with 0.5 cents per kilowatt for both small and large PV-systems. In addition, rooftop PV-systems are more stimulated than field PV-systems. The Dutch government is more reluctant to stimulate solar PV-projects on profitable agricultural lands. Field and water systems will be granted an additional year to be completed (i.e. four instead of three years).
  • Wind: the amendments to the amounts for wind energy are limited. The Minister intents to also stimulate SDE+ for smaller wind turbines in order to stimulate civilian initiatives.
  • Other: for the categories thermic conversion, geotherm and renewable gas, the subcategories for which the grant can be applied have been amended. For example, two new grant categories have been added to the SDE+ for renewable heath: “kettle on B-wood” and “kettle on wooden pallets for urban heating”.

The Appointment regulation of the SDE categories (Aanwijzingsregeling SDE-categorieën) for the spring of 2019 has been published in the Government Gazette on 19 February 2019. The amendments listed above have been included therein. The first application round of 2019 was open from 12 March 2019 up to 4 April 2019. During autumn, the second application round will be opened. The Minister aims to publish the conditions of this application round prior to 1 July 2019.

Amendment SDE-programme

The amendment of the general SDE-programme has been published in the Government Gazette on 18 February 2019. The amendments mostly concern the calculation of the solar energy proceeds for sun-following systems, an exception to the duty to measure production per decision (beschikking) and the use of lignin for the combustion of biomass.

Wind at sea

For 2019, two tenders are planned for wind at sea with an aggregate capacity of 1,400 MW. It is assumed that these tenders will be closed without grants and that no SDE+ means will be required. On 14 March 2019, the tender for lots II and IV in the area Hollandse Kust (south) have been closed. During this tender round, it was indeed confirmed that parties are interested to build and exploit these wind projects without grants. RVO is currently assessing the tenders.

2020: SDE++

2019 will be the last year that the SDE+-programme will be used in its current form. As of 2020, the Minister will introduce the new SDE++-programme (Stimuleringsregeling voor een Duurzame Energietransitie). The broader SDE+ aims to reduce the emission of greenhouse gasses on Dutch territory. In addition, the broader SDE+ will stimulate techniques by refunding the unprofitable parts of these techniques by way of an exploitation grant. The difference is that techniques will compete based on the reduced tons of greenhouse gasses instead of energy proceeds. The grant will be granted by comparing the amount of grant applied for ant the volume of CO2 that will be reduced. This will enable a more efficient way of spending grants. Based on an assessment, the possible qualifying techniques will be identified. To qualify as a qualifying technique, such a technique should at least meet the requirement of being “marketable” and the requirement of substance. The further development of the broader SDE+ will take place during 2019. The draft SDE+ programme will be consulted, after which the SDE+ programme will be offered to the advice committee of the Council of State (Raad van State). The European Committee will be notified of the SDE+ programme due to state aid regulations. This article was written by Stephan Sluiter (s.sluiter@ploum.nl)

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