Netherlands

Netherlands

INDUSTRY LOOKS ON THE BRIGHT SIDE AFTER GOVERNMENT AXES ALL SUPPORT OF WIND

All wind energy subsidies in Holland have been abolished by the country's new government as of 1996. To compensate a little for this major blow the government has put forward an exemption from the intended future levy for energy. The alternative energy organisations are determined to fight on and hope to get wind energy back on the government's agenda. Programmes will proceed as planned and the government might even be urged to find other ways of stimulating alternative energy.

All wind energy subsidies in the Netherlands have been abolished by the country's new government -- with no indication of whether a serious market stimulation initiative will replace the support programme. Government subsidies have formed the basis of wind power development in the Netherlands since 1986 when the five year Integral Wind Energy Programme was introduced.

Initial reaction to the news was shock and disbelief in the Dutch wind community. No one seemed able to grasp the consequences of the stop to the country's capital subsidy of wind plant, to take effect by the end of 1995. The subsidy made wind energy economically viable.

By late October, however, the attitude seemed to have changed to one of resignation -- even optimism in some quarters. According to Cees Daay Ouwens, energy expert with the province of North Holland, the new mood is inspired by the belief that development of renewables cannot be stopped. He spoke at a recent conference on alternative energy sources. Jan Paul van Soest, director of the Centre for Energy Conservation and Clean Technology, concluded at the same conference that the world of sustainable energy has enough dreamers to get wind energy back on the political agenda. And "dreamers don't cry."

A huge NLG 300 million cut in the budget for research and development of alternative energy sources was part of the agreement on which the new government was founded. On October 11, the Minister of Economic Affairs, Hans Wijers, informed parliament that NLG 180 million would be cut from the budget while the remaining NLG 120 million would be removed from support of technological development. This decision axed subsidies for all alternative energy sources, including wind, solar and combined heat and power, which has been rapidly developed in the Netherlands in recent years

Some compensation for the loss of the investment subsidy was put forward by Wijers -- alternative energy sources will be exempt from the intended future levy on energy -- but it is a poor substitute. The exemption would amount to NLG 0.04/kWh if the levy is introduced as planned next year. Ernst van Zuylen from PAWEX, the organisation of private wind turbine owners, says this compensation falls far short of what is needed. PAWEX has been arguing for replacement of the government's capital subsidies with a fair rate of pay for wind generated kilowatt hours of NLG 0.20/kWh.

Utility organisation EnergieNed says it is too early to comment on whether pay for wind will be increased. EnergieNed's Joop Worn says exemption from the proposed levy will be a stimulus for alternative energy. But the organisation has already reduced its target for wind energy from 1000 MW to a little more than 420 MW installed capacity by 2000. The effect of the subsidy cancellation has yet to be taken into account, but a further reduction of these targets is not "unthinkable," he says.

In the meantime most in the wind community are choosing to look on the bright side. Domien Brugemann from distribution utility EDON says the subsidy loss will not influence his company's wind energy plans. All projects will go ahead. According to Brugemann the subsidy loss was to be expected. When introduced eight years ago, the Dutch wind energy support programme was intended to run for a limited period of five years, during which the price/performance ratio for wind turbines was supposed to become competitive with other types of electricity production. Brugemann thinks the cutback on the investment subsidy is a challenge for people in wind energy to improve performance -- a challenge he has no doubt can be met.

The president of the Wind Energy Foundation North Netherlands, Dirk van der Ham, is optimistic, too, but for other reasons. He has no intention of shedding tears about the loss of the subsidy programme -- even though wind projects proposed by the mainly farming members of his organisation will not be economically viable without subsidies. But he believes the loss of capital support will urge the economic affairs minister to find other ways of stimulating alternative energy -- such as an obligation on the utility companies to buy wind power at NLG 0.20/kWh. The door is certainly open to this solution.

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