New wind rates in Netherlands

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Strong industry criticism of the Dutch government's new environmental electricity production (MEP) subsidy has proved effective with junior economics minister Joop Wijn announcing a substantial increase in the proposed rates. In place of the EUR 0.024/kWh originally offered (Windpower Monthly, December 2002), onshore wind will now receive a production incentive of EUR 0.049/kWh while offshore will receive EUR 0.068/kWh instead of EUR 0.05/kWh.

When combined with an estimated market price for power of EUR 0.21/kWh and an eco tax "flush-through" payment of up to EUR 0.29/kWh, this brings the potential price to EUR 0.99/kWh. But once power retailers have deducted the cost of marketing and sales from the EUR 0.29/kWh ecotax component, the price available will be nearer EUR 0.86 kWh, calculate industry observers.

Mathieu Kortenoever, whose E-Connection agency is part of the consortium behind the proposed Q7-WP 120 MW offshore wind farm, says the onshore rates are acceptable, but that he will be joining forces with power company Nuon and oil giant Shell -- the developers of the Netherlands' proposed 99 MW nearshore pilot wind farm -- to ask parliament for a EUR 0.77/kWh MEP incentive for these projects. The proposed rate of EUR 0.68/kWh is satisfactory in the long term, but the extra costs of pilot projects requires a higher rate, he says.

Onshore, the stipulation that projects will be entitled to the MEP subsidy for ten years, or the equivalent of 18,000 hours of operation at full capacity, which ever comes sooner, is cause for concern. This will encourage the construction of cheaper less efficient wind turbines says Ernst van Zuylen of renewables concern, Ecofys. Kortenoever is also worried about the wording of the MEP regulation which implies that the actual amount of subsidy awarded can be revised after ten years. "These are details which need to be sorted out," he says.

Market developments which possibly persuaded the government to hike the offer were deals by two of the Netherlands' largest utilities to pursue their wind businesses out of the country with significant investments in foreign renewables. Nuon is buying both the production and green credits from a 40 MW wind station in Norway (page 25), while Essent bought German station operator Winkra-Energie (page 29)

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