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24 April 2020 / article

Renewable energy subsidies and COVID-19 in the Netherlands

The Minister of Economic Affairs and Climate Policy (‘the Minister’) informed Parliament in a letter, dated 21 April 2020, on several renewable energy subsidy (SDE+) topics, including the impact of the COVID-19 pandemic on the renewable energy market in the Netherlands.

In this respect, the Minister takes into account that renewable energy developers who have received or will receive SDE+ subsidy are or will be facing difficulties in realising these projects due to the COVID-19 pandemic.

Ensuring development of renewable energy projects

Cancellations and delays of renewable energy projects caused by suppliers in financial distress or lack of labour to construct the solar-PV park or wind turbines will threaten the renewable energy goals as set by the Dutch government and ‘strengthened’ by the Urgenda verdict. To meet these goals (at least) in 2030, the Minister provides for one key measure to allow renewable energy developers some ‘leeway’ in the condition which regards the maximum realisation period when granted SDE+ subsidy.

In short, the ministerial measure consists of adding one year to the realisation period for a project that received SDE+ subsidy, making a longer realisation period possible without jeopardizing the project by losing the SDE+ subsidy.

Current conditions with regard to the realisation period

To be able to qualify for an SDE+ subsidy one of the requirements is that the project needs to be realised as soon as possible after obtaining the positive SDE+-decision.
For a solar PV-project the realisation period is set at 3 or 4 years depending on the total nominal capacity of the project and whether it is ground or building mounted. The additional year would give developers a total of 4 to 5 year period for realisation respectively.

For onshore wind energy projects which need to be realised within 4 years after the SDE+ decision date, the 'COVID-19' measure would give a total of 4 or 5 years of realisation.

Requirements

The letter does not provide detailed requirements. The Minister only states that the delay needs to be “beyond the control of the project developer” and that the project can be realised within that extra given year. Project developers eligible for or granted SDE+ subsidy and are or will be facing the abovementioned delay can request an exemption together with a statement to ensure that it is indeed possible to realise the project within that extra year. This exemption needs to be obtained from the Netherlands Enterprise Agency (‘RVO’), the governmental body responsible for SDE+ applications.

Market developments

To conclude: the letter also states some provisional outcomes of the Spring 2020 SDE+-round that closed on 2 April 2020. One of the major (and for the time being positive) outcomes is that solar-PV and onshore wind energy projects are (again) dominating the number of applications in 2020 with a number of 7.395 applications for solar-PV (with a requested SDE+ budget of slightly over EUR 2 bn) and 40 applications for onshore wind energy (with a requested SDE+ budget of EUR 140 mln).



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