Securing supplies in Germany and China -- Dutch utility seeks wind abroad

Dutch utility NUON is seeking to triple imports of renewable energy in the coming year and has begun to invest in wind plant abroad. So far, it has built a wind plant in Germany and has a majority stake in China's first commercial wind farm, among others. Soaring domestic demand for green power and a desire to increase the quota of renewables in its electricity supplies is behind the utility's decision. The utility has called for a national minimum renewables requirement.

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Construction of a wind plant in Germany is the latest foreign venture of Dutch utility NUON in its quest to triple imports of renewable energy in the coming year. Soaring domestic demand for green power -- and a desire to increase the quota of renewables in its electricity supplies -- is behind NUON's decision to invest abroad.

Demand in the Netherlands for NUON's green electricity product, Natuurstroom, climbed from 10,024 subscribers in 1998 to 21,664 by end 1999. By increasing the share of imported renewables from 10% of its total renewables in 1999 to 30% by end 2000, NUON can boost production from 561 GWh to 1200 GWh, the company estimates, thereby increasing renewables share in total electricity sales to 5% by end 2000. Despite its interests in half the Netherlands' wind energy production, two-thirds of its hydro power and a third of its solar production, NUON was unable to supply the 77 million kWh of Natuurstroom sold last year from domestic resources.

Power from NUON's new 6 MW wind farm on German soil, consisting of Dutch Lagerwey machines, was due to start arriving in the Netherlands from late last month. The power will go directly to Naturstroom customers. NUON chose to build the plant in Germany to take advantage of the country's more liberal permitting process for wind farms.

In addition to its German investment, NUON also has a 55% stake in China's first commercial wind farm, a 24 MW facility on the South China island of Nan'ao. The Dutch utility is also developing a 2 MW offshore wind plant off the coast of northeast England near Blythe. Most of NUON's renewables imports will, however, be generated from hydro plants to be acquired in Turkey and France. In total, hydro is set to grow from last year's 60 GWh to 400 GWh by end this year.

The decision to treble renewables imports was taken after a series of mergers left NUON with a 40% share of the domestic electricity market. Rather than renege on its earlier commitment to fuel 5% of power sales from renewable resources by end 2000, the company decided to look abroad for resources, says

Annemarie Goedmakers, director of renewables at NUON, during the presentation of the company's 1999 annual report.

Renewable energy development remains a "spearhead" of the company's long term business strategy, says Goedmakers, NUON has set itself the additional target that renewables should reach 10% of its production by 2010. The Dutch government requires utilities to secure just 3% of 1995 sales from renewable resources by end 2000 and aims to boost renewables' national share to 10% by 2020.

A strong green profile has clear advantages in attracting international attention. On a liberalised energy market, this is a commercial asset believes Goedmakers. "It's becoming increasingly important for energy companies to excel in one area, we're very good at renewables," she says.

Call for quota legislation

NUON's conviction that it can make money out of green power was further demonstrated by its call, on the eve of the EU energy council's discussion of the renewables draft directive at the end of May, for the Dutch government to institute a minimum renewables requirement. NUON chairman Tob Swelheim fears that the end of the voluntary agreement between the utility sector and government to secure 3% of 1995 production from renewables by end 2000 could also mean the end of wind development. The government needs to impose renewables quota commitments to keep the momentum going, says NUON.

"It is unfortunate that the original support for compulsory fixed renewables quotas in the Netherlands seems to be diminishing precisely when, in neighbouring countries and some states in America, a definite trend towards tougher commitments is becoming apparent," says Swelheim.

GREEN trade rules needed

With its growing international interests -- the first green kilowatt hours from its Chinese wind farm are now coming in -- NUON is also keen to see action on green trade at the international level. The development of a system for handling "green rights" is vital, and in order "to create the necessary volume for this trade, it is imperative that national and international targets be established."

NUON is urging the Dutch government to join with members of the European parliament to "develop guidelines which will stimulate international trade so as to significantly increase the production of renewable energy." An internationally recognised system of green energy certification is a clear priority.

Ideally, says Goedmakers, NUON would like to see a certification system which would allow power companies to offer consumers a range of different green products, such as domestically produced green electricity, at a slightly higher price than Chinese wind power or hydro, for example.

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