About turn by politicians saves offshore subsidy -- Dramatic renewable energy debate in Netherland's parliament

In a dramatic U-turn, right wing members of the Netherlands parliament backed away from their opposition to offshore wind power last month leaving the way clear for parliament to vote through a motion which will release around EUR 500 million in subsidy to the sector. The vote follows more than a year of off-again, on-again support for offshore wind in the Dutch North Sea, with economics minister Laurens Jan Brinkhorst slapping two moratoriums on subsidies to the sector within the past year, the most recent being an 18 month halt to allocation of grants introduced in the summer (Windpower Monthly, June 2005).

Nonetheless, the government, a centre-right coalition, included a EUR 1 billion subsidy allocation for offshore wind power to 2013 in its annual budget, announced as always on the third Tuesday in September. Around EUR 477 million of this is already earmarked for two advanced projects, the 120 MW Q7 proposal, which is being developed by a consortium led by E-connection, and the Near Shore Windfarm, a joint 108 MW venture between Shell and Dutch energy company Nuon.

Favours nuclear

But several members of parliament on the Dutch political right, particularly Paul de Krom of the VVD, who favours nuclear energy, strongly objected to the full EUR 1 billion being dedicated exclusively to offshore wind. He put forward a motion calling for investigation of whether the remaining amount should go to other renewables or nuclear energy.

De Krom won support from the right-wing LPF protest party, founded by murdered politician Pim Fortuyn. Meantime, the Christian Democrats, the majority party in the Dutch coalition government, also took a sceptical view on granting the remainder of the EUR 1 billion to the wind sector.

For a while in early October there was a strong possibility that offshore wind energy could lose out on half a billion. All was hinging on a parliamentary debate on renewables energy, scheduled for October 12. As the debate got into its stride some politicians were forced to back down on policies they had held only 24 hours before it began. A surprise about-turn occurred when it was pointed out that their position on the subsidy would jeopardise the Netherlands' 2010 renewables targets. The ruling Christian Democratic party then qualified its position, saying it was not totally against offshore wind energy, but that it merely wanted the subsidy to be spent in a wise way; if offshore wind energy was the most efficient method, then that was acceptable.

No consistency

While relieved the subsidy appears to be safe, the wind industry still fears what the future can bring. There is no consistent long term strategy for wind energy in the Netherlands.

Cees Bakker, chairman of renewable energy organisation ODE, says he is not necessarily surprised by the turnaround, but "glad." Signals from The Hague, however, the home of the Dutch government, are still far from positive. "We did our best to save wind energy and hope this can be the beginning of a real debate," he says. The EUR 500 million is not enough, he adds, and nothing was mentioned about what happens after 2013.

Subsidies are needed now, adds Bakker, so that further investment in knowledge and innovation can take place to drive down the cost of offshore wind technology. Furthermore, as Greenpeace campaign leader for climate and energy Joris Thijssen points out, the government is still making it impossible for offshore wind power developers to gain site permits -- and it has to be remembered that the EUR 1 billion is not new money.


Amused by the 180 degree U-turn in views, Diederick Samson, renewables spokesman for the Dutch labour party PvDA, also remains worried about the government's position on renewables. The money is now potentially available, but the site licences need to be too, he says.

"Licensing is an absolute disaster, it is pure incompetence," he says. Ruud van Leeuwen of sustainable energy developer Evelop agrees. After more than two years considering the issue, the government is still trying to devise a workable permitting system. It has vaguely alluded to more information being given in the autumn, but the industry is not holding its breath. Without the permits, the EUR 500 million is likely to sit in the bank. Meantime, more than 50 applications to build at least 8000 MW of offshore wind plant are residing with government (Windpower Monthly, June 2005).

Long term market

According to Samson, the government's attitude means the market for offshore wind power in the Dutch North Sea lacks the security to draw potential investors. What is needed is a well structured long term market. "Offshore wind energy has to have a life without subsidy," he says.

Van Leeuwen warns that both industry and investment will move to countries such as Germany, the UK and Belgium where governments are creating more stable markets. The EUR 1 billion subsidy is "the best we can get given the circumstances," but a government offshore target of 750 MW by 2010 is very disappointing. "In bad circumstances this was good news. But the ambition level is still very low. We need more high-level support," says Van Leeuwen.