In the Netherlands another year of moderate growth in installed capacity gave little indication of the new market forces beginning to be felt in the sector following the liberalisation of the green electricity market and the launch of the associated green certificate scheme. Nevertheless, with soaring green power sales, rising kWh prices for wind and the first stirrings of international renewables trade, many in the industry believe 2001 to have been one of the most significant years in the last decade.
Provisional figures indicate that it was pretty much business as usual for Dutch wind in 2001. Sixty-three new wind turbines with a combined capacity of 42.25 MW went in the ground, 11 turbines together worth 1.9 MW were removed from production, bringing the year end total to 1,321 turbines with an installed capacity of 483 MW. Combined output amounts to an average 988 million kWh a year, or 0.91% of national energy consumption, calculates independent consultancy Wind Service Holland. With the exception of a poor year in 2000, when just 38 new turbines a (32.79 MW) were built, 2001 falls comfortably within the 42-47 MW annual growth seen over the last five years.
Among wind turbine suppliers, honours were again fairly evenly divided between NEG Micon with 20.7 MW from 27 turbines and Vestas with 16.5 MW from 25 turbines. Other manufacturers were very much "also rans." Nordex (2.4 MW), Bonus (1.8 MW), Enercon (600 kW) and Lagerwey (250 kW) accounted for the remainder. Average capacity of 671 kW per machine indicates the popularity of the Vestas V47 660 with 23 turbines sold. Among NEG Micon sales the preference was for higher capacity machines with ten 900 kW units, ten 750 kW machines and just seven of its 48/600 units being built.
Nor were there any surprises in regional distribution. Flevoland at 15 MW once again took the lead, this time ahead of Noord Holland, which with 11.82 MW can claim the year's largest wind farm, the 11.22 MW, Vestas equipped Amsterdam Harbour farm developed by Nuon (which was partially built in 2000 and was erroneously included in previous figures). Flevoland can, however, claim Holland's first NEG Micon 900/52, while the first Nordex 43/600s in the Netherlands went up in the province of Groningen which, along with neighbouring Friesland, showed a slight revival in new building activity, booking 5.64 MW and 5.46 MW, respectively.
The explanation for yet another year of subdued performance has a familiar ring. "Location, location, location," says Jaap t' Hooft of government renewables agency Novem. As long as Dutch planning regulations remain stacked against the wind developer, new capacity is always going to be limited. For this reason t' Hooft identifies the new national covenant between central and local government, known by its acronym, BLOW, as one of the year's most important events.
Signed in July, BLOW replaces a 1991 agreement between central government and the seven windiest provinces to build 1000 MW by 2000 with a new target of 1500 MW onshore capacity by 2010. This time the association of local councils has been made party to the agreement. Its exclusion from the previous agreement was a serious error, says t' Hooft. Under BLOW, the government is charged with identifying suitable locations for turbines. If not enough are found, the country's provinces will be expected to nominate sites in 2005. This time too, all provinces have agreed to guarantee minimum targets (table next page).
In addition to the 1500 MW onshore target, the Fifth National Public Planning Review announced that space will be found for some 6000 MW offshore wind energy capacity as a contribution to new national renewables targets pegged at 5% renewable energy use by 2010 rising to 10% by 2020. No specific wind targets were set.
BLOW all talk
Others disagree about the significance of national policy initiatives. Mathieu Kortenoever of national wind farmers' association PAWEX and energy consultancy E-Connection dismisses BLOW "as a lot of talk." The agreement "did not include local councils, but representatives of local councils," he points out. He also finds it ironic that in the same breath that it announced the 6000 MW offshore provision, the government also proclaimed a two to three year moratorium on offshore development to allow a concessions system for the allocation of sites to be worked out.
Kortenoever also detects a divided purpose behind the other major legislative intervention in wind power's planning problems last year -- the long awaited exemption of wind plant under 15 MW from compulsory environmental impact reports. "This will make it easier to build solitary turbines just when the trend is away from solitary turbines," he says.
For Kortenoever and most other industry observers the real action in 2001 was off the pitch. In July (six months late) the green electricity market for domestic consumers was liberalised, allowing Dutch householders to shop around for green power deals and Dutch power companies to set out their stalls to attract each other's customers. Although the EUR 0.583/kWh ecotax levied on grey power means that green power can be retailed below the price of grey, most power companies have gone for price parity with only newcomer Energie Concurrent offering green for cheaper than grey. Nevertheless, the number of green power customers continues to climb and reached some 700,000 at the end of last year, from an estimated 250,000 at the start of 2000.
Along with the liberalised market came the green certificate sub-market, effectively a voucher system for de-coupling renewable added value from physical power to allow them to be separately traded. Unfortunately the certificate market regulations had little to say about ownership of certificates under old contracts, leading a number of utilities and wind farmers to sort out the fine print in court.
The hotly contested certificate ownership issue is an indication of the appreciating value of wind energy in the market place. With the current ecotax regime guaranteeing a significantly higher profit on green power sales than grey there has been a considerable increase in the kilowatt hour price of new contracts. Before July, wind energy commanded between EUR 0.0817-0.0907/kWh. Recently there have been confirmed reports of EUR 0.091/kWh contracts with rumours of EUR 9.9/kWh in circulation.
"This may be a bubble," says Kortenoever, "But it has definitely had an effect on the market." The fact that higher prices have not yet stimulated more wind power production is due partly "to the poor implementation of the green certificate system -- technical codes on metering and program responsibility are still being clarified, for example. But this will be sorted out in due course," he believes.
Healthy profit margins, soaring consumer demand and limited domestic production inevitably led power companies to look abroad for green credits. A run on cheap Norwegian hydro was noticeable shortly after liberalisation. In response the government introduced strict regulations on green power imports. As of January 2002, foreign renewables are eligible for Dutch certificates only where there is physical power imported, the power is certified and there exist reciprocal trading possibilities between the two national markets. In addition the ecotax exemption from small hydro has been removed.
Annemarie Goedmakers, renewables director at major Dutch power company Nuon -- which had made substantial investments in domestic and foreign small-hydro -- understands the government's desire to stop Dutch tax revenue flowing out of the country, but argues that these measures have simply shifted the money flow from small hydro to biomass without doing anything to boost overall production. "We should stick to real renewable resources and make the productive capacity of renewables increase instead of simply shifting sources of energy from, say, Norwegian hydro to Swedish biomass. It's alright if you build an extra plant in Sweden and use it in the Netherlands, but it doesn't need the amount of subsidy it gets at the moment," she says.
"We need an energy policy which doesn't pit different renewable technologies against each other. At the moment if you want to obtain green certificates as cheaply as possible you would use dirty biomass production in the Netherlands," says Goedmakers. The announcement that Shell is to enter the Dutch green power market from March this year with the aim of securing 40,000 customers by 2003 using biomass bought from Swedish mega-utility Vattenfall lends additional weight to Goedmakers' analysis.
Further criticism comes from the national renewable energy association, the Projectbureau Duurzame Energie (PDE). The organisation rejects the findings of a recent report published by the Dutch Energy Research Centre (ECN). Using current green power sales as the base, it forecasts that 11% of all electricity sold in Holland by 2010 will be green. "This creates the impression that all is well with renewable energy in the Netherlands. The opposite is true," argues the PDE. "In the current situation rising demand does not equate with rising production. Once imported electricity is eligible for green certificates, it will be easier and more profitable for energy companies to get their certificates abroad. And while foreign supply is greater than Dutch demand, Dutch imports won't lead to an increase in foreign production."
Furthermore, points out the PDE, when all forms of renewable energy are taken into account including renewable heat and gas, the report shows that only 3.5% of total energy use in 2010 will come from renewable resources where the government's targets require 5% renewables.
The ECN report anticipates domestically produced biomass and waste processing (responsible for 55% of renewable energy in 2000) continuing to be the sector leader, followed by imported power (with stricter regulations anticipated for 2003-2004) followed in turn by wind energy. For wind it forecasts installed capacity of 1050 MW onshore and just 500 MW offshore by 2010.
In general, however, both Goedmakers and Kortenoever are optimistic about the prospects for wind energy in the Netherlands. "An interesting year whose effects will be felt for years to come," says Kortenoever. "I think for European wind, it's a very positive situation, for Dutch wind there is a positive future to be seen but we still have to grab it," says Goedmakers.