SDE (stimulering duurzame energie): Renewable energy and CHP production aid scheme

Source: JOIN IEA/IRENA Policy and Measures Database
Last updated: 11 July 2013

Following the MEP renewable energy and CHP subsidy schemes, which ended in August 2006, the Dutch government decided on a new target for the reduction of CO2 emissions; 30% CO2 reduction in 2020. In order to meet this target, the reform and continuation of the MEP schemes was decided. The two previous schemes were combined into a new scheme called SDE (stimulering duurzame energie). In August 2007 the Dutch government submitted the scheme for approval under EC Treaty state aid rules. In December the European Commission auhorised the aid scheme, to stimulate production of renewable energy and Combined Heat and Power. The extra available budget for the SDE is estimated at EUR 2,144 million. Unlike the MEP, the SDE is fully financed by direct government support. The regulation was published on 3 March 2008, and subsidy requests can be submitted as of 1 April 2008 from SenterNovem, the Ministry of Economic Affairs agency. Differences from the MEP are that projects are selected through tendering, and that the subsidy amounts will be corrected and vary depending on fossil fuel energy prices. Also, hydro projects are not eligible, though the scheme applies also to biogas. The scheme can be called a "modified feed-in tariff"; a fixed subsidy is guaranteed, as in a feed-in tariff, with an option for a higher price per kWh if the electricity price goes above the subsidy ceiling. Thus, renewable energy producers are provided a fixed price per kWh. The scheme acts as a premium if the electricity price goes below the feed-in tariff. However, if the market electricity price is at or above the feed-in tariff price, no subsidy is received from the government. For example, the estimated subsidy amount in 2008 for sewage-gas and waste water electricity, as well as high efficiency waste generation is zero, since the wholesale market price is expected to be higher than the estimated cost of production from these technologies. Offshore wind is not eligible for subsidies in 2008 and 2009; the first tender will be in 2010. In addition, annual expenditures are capped by technology. Estimated yearly caps are calculated based on capacity installed and estimated installations from 2008 to 2011. These are: EUR 1 million for biogas from sewage and waste water; EUR 19 million for small-scale PV (0.6 kWp-3.5 kWp); EUR 68 million for biomass CHP, co-digestion of food industry waste and manure; EUR 119 million for off-shore wind; EUR 129 million for on-shore wind. A table of the subsidy amounts according to energy type is available, in Dutch, at:

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