Netherlands

Netherlands

AGREEMENT ON WIND PAYMENTS AT HAND

In Holland a decision on rates of pay for wind power is expected in the near future between EnergieNed and Pawex. The final outcome seems to be a ten year agreement on NLG 0.17/kWh plus minus a few tenths of a cent and other incentives such as tax exemption for "green funds." The mediation by the director general at the Ministry of Economic Affairs has been urged further by the government's decision to remove Holland's 30% wind turbine subsidy by the end of this year.

A decision on rates of pay for wind power in the Netherlands is expected this month. Painfully slowly, EnergieNed, the organisation of electricity distribution companies, and Pawex, representing private owners of wind turbines, have been drawing closer to an agreement over past months. It seems a rate of NLG 0.17/kWh fixed for ten years, plus or minus a few tenths of a cent, is to be the final outcome.

In late June, as negotiations under the mediation of Stan Dessens, director general at the Ministry of Economic Affairs, were drawing to a close, both sides were using the excuse of an imminent decision to remain silent. But as well as NLG 0.17 a kilowatt hour, it appears that other incentives will include tax exemption for "green funds."

The wind market in Holland has been in limbo since the collapse of ambitious plans by the utilities to develop the country's resource themselves. With the responsibility for exploiting the Dutch wind resource thrown back into the private sector, fair pay for wind power became of paramount importance. But talks between Pawex and EnergieNed came to a standstill four years ago with EnergieNed refusing to pay more than a base rate of NLG 0.07-0.09/kWh.

Although money for wind power was also available through the utility sector's environmental action programme (MAP), Pawex was not prepared to rely on a programme which could be changed on utility whim. Subsequent arbitration failed to move the talks forward until the intervention of Dessens. Urgency has been lent to his peacemaking by the government's decision to do away with Holland's 30% wind turbine subsidy -- pulling the rug from under the Dutch wind business.

Mediation talks have been fraught with hiccups, the most recent of which occurred on June 14 when EnergieNed appeared to backtrack from a provisional agreement for a tariff of NLG 0.163/kWh, made up of a standard tariff of NLG 0.079, a guaranteed contribution from the environment programme of NLG 0.054/kWh, and a further NLG 0.03 based on a proposed energy tax exemption. Pawex and Dessens professed themselves shocked when EnergieNed, under the leadership of Rob van Hullenaar, slapped a proposal for just NLG 0.14/kWh on the table for a fixed period of ten years.

Another pause in the talks followed until the two sides met again on June 23. Here it appears EnergieNed was again prepared to discuss the previously agreed rate of NLG 0.163/kWh, although it was not happy with 15 year contracts. As a result, ten year contracts at NLG 0.17/kWh seem to be the most likely outcome -- made up of Energie-Ned's NLG 0.14/kWh proposal, plus an NLG 0.03/kWh energy tax exemption which the utility negotiators seemed to "forget" about at the June 14 meeting.

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