Netherlands

Netherlands

Extra support from climate program -- Wind to reduce CO2

Dutch wind energy capacity could be increased by 50% on the back of a NLG 111 million (EUR 50.4 million) CO2 reduction subsidy funding round announced by the economics ministry last month. A total of 43 environmentally friendly investment projects have been selected for subsidy in the third of four funding rounds in the Dutch government's CO2 Reduction Scheme program. Together they represent NLG 1.8 billion (EUR 817 million) of private investment.

Of the 43 successful applications, 20 new wind energy ventures claimed more than half the funding with 11 separate concerns being awarded subsidies to help develop projects with a potential installed capacity of 216 MW -- just under half the Netherlands' existing capacity of 448 MW.

While there is no guarantee that subsidised projects will be constructed immediately, funding was conditional on the developers being able to demonstrate that their projects conformed to local council planning regulations and that they had obtained, or were likely to be granted planning and environmental permits.

"In total 50 wind projects were submitted for consideration," says the CO2 Reductieplan Bureau's Rijnder Wielinga. "This in itself is a huge increase on earlier funding rounds. The successful applicants were the ones that an independent commission judged most likely to have construction work start within a year." In the two earlier rounds of funding, in 1998 and 1999, 60 MW and 110 MW of new capacity received funding. The CO2 Bureau is unwilling to disclose the percentage of this capacity that has been realised to date on the grounds that a number of projects are ongoing.

Doubts and optimism

An industry insiders says that the latest funding allocation is unlikely to signal a sudden explosion in the growth of Dutch installed capacity, but believes it gives a positive indication of the amount of capacity actually in the pipeline.

Wielinga rejects the suggestion that 216 MW is an optimistic prognosis of short term capacity growth. While he concedes that some of these projects will not survive the planning process, he points out that a number of wind projects were rejected on the grounds that they were profitable without subsidy and should be added to the total potential capacity.

In order to ensure the government got the most CO2 reduction for the tax payer's money, funding was allocated on a "Dutch auction" basis. Companies were asked to name their own subsidy amount to a maximum of 30% in the knowledge that projects with the lowest subsidies had the greatest chance of success. In total the subsidy aims to reduce Dutch CO2 emissions by an extra 1.0 megaton annually.

On completion of the final funding round later this year, the scheme will have provided NLG 939 million (EUR 426.1 million) funding for industrial CO2 reduction projects. In total the scheme is expected to deliver six million tonnes of CO2 savings which is half the Netherlands' Kyoto target of 12 million tonnes reduction from 1990 levels.

Supervision and administration of the funds is the responsibility of the CO2 Reductieplan Project Bureau and government agencies Novem and Senter.

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