The terms of the Renewable Energy Production Subsidy Scheme 2011 (Subsidieregeling Duurzame Energieproductie 2011, "SDE+") were recently published in the Government Gazette (nos. 9424 and 9427). The SDE+ is a subsidy programme for producers of renewable electricity and renewable gas which will open for applications on 1 July 2011. The new rules specify the categories of production facilities which are eligible for a subsidy, the conditions for obtaining a subsidy, and the subsidy amounts.

Changes introduced by SDE+

The government decided to make a number of changes to the former renewable energy subsidy scheme. The changes include the introduction of:

  1. a maximum basic amount of EUR 0.15/kWh for renewable electricity and EUR 1.04/Nm3 for renewable gas;  
  2. a comprehensive budget ceiling for all categories of renewable electricity and for all categories of renewable gas;  
  3. a phased application procedure;  
  4. an "open" category.  

1. Basic amounts and division into categories

The new rules indicate the categories of energy production facility for which a subsidy may be requested and specify a basic amount for each category. For the production of renewable electricity, the main categories are: landfill gas or biogas from sewage or wastewater treatment plants, biomass, waste incineration, wind energy (land), wind energy (sea), hydropower, photovoltaic solar panels and others (geothermics and osmosis). For the production of renewable gas, the main categories are: landfill gas or biogas from sewage or wastewater treatment plants and biomass.

The basic amount, which is the point of departure for determining the subsidy amount, reflects the average energy production cost of a facility in the relevant category. The average cost is based on calculations made by ECN (Energy Research Centre of the Netherlands) and testing and certification company KEMA.  

The maximum basic amount is EUR 0.15/kWh for the production of renewable electricity, or EUR 1.04/Nm3 for the production of renewable gas. Categories whose basic amount, as calculated by ECN and KEMA, exceeds the relevant maximum are only eligible for subsidy via the "open" category.

2. Budget ceilings

The new rules set a budget ceiling in 2011 of EUR 750 million for renewable electricity subsidies and another EUR 750 million for renewable gas subsidies. The old system had a specific ceiling for each category of energy production facility. Under the new system, therefore, the various categories of renewable electricity compete against each other for the total available subsidy, and the same applies to the various categories of renewable gas.

Once the relevant budget ceiling has been reached, in principle no further subsidies are available. There is an intention to change these rules so that if either of the two budgets is exhausted and there are still funds available in the other, the remaining funds will be reallocated.

3. Phased application procedure

Under SDE+ the submission period for subsidy applications has four phases, which extend from 1 July to 30 December 2011. Applications for projects in categories with a lower basic amount can be submitted in an earlier phase than those for projects in categories with a higher basic amount. As applications are considered in the order of their submission, those relating to categories that are relatively more cost-efficient are less likely to be rejected due to the budget already having been exhausted.

The first phase is for categories with a basic amount of up to and including EUR 0.09/kWh (EUR 0.62/Nm3). As long as the remaining budget still permits, the maximum basic amount is increased in each consecutive phase until it reaches EUR 0.15/kWh (EUR 1.04/Nm3) in the fourth phase. An overview (in Dutch) of the various categories of production facilities and the basic amounts per category and per phase can be found here.

4. Open category

As indicated above, the basic amount for a particular category determines in which phase(s) producers in that category are allowed to apply for a subsidy. As the basic amounts are based on average production costs, it is possible that a producer can realise a project for less than the basic amount for its category. To enable such a producer to apply for a subsidy in an earlier phase than would otherwise be possible, and thereby encourage more cost-efficient projects, each phase has what is called an "open category". The basic amount of the open category is equal to the maximum basic amount for the relevant phase. For example, a producer of hydropower energy (€ 0,5 m and < 5 m) (for which the basic amount is EUR 0.122/kWh) is normally only allowed to apply for a subsidy in phases 3 and 4. If, however, the producer's production costs are less than the maximum basic amount for phase 1 – i.e. EUR 0.09/kWh – or phase 2 – i.e. EUR 0.11/kWh – the producer can apply for a subsidy under the open category in phase 1 or 2.  

Furthermore, the open category is always available for categories of production facility for which no basic amount has been determined because it would exceed the maximum basic amount of EUR 0.15/kWh or EUR 1.04/Nm3.  

Financing

The SDE+ will be financed by a surcharge, to be imposed from 2013 onwards, on the energy bills of individuals and companies. Legislation is now being drafted for this purpose, to be called the Renewable Energy Surcharge Act.

Applications for subsidies under the SDE+

Applications for subsidies under the SDE+ can be submitted from 1 July 2011 at the online eLoket of Agentschap NL. Companies and institutions (profit and non-profit sector) can log in with eHerkenning. If sufficient budget remains, the second phase will start on 1 September, the third phase on 1 November and the fourth phase on 1 December. The SDE+ application module (in Dutch) can be accessed in two different manners: either through eLoket or on the SDE website.