A formula for fraud says industry -- New Dutch subsidy

Google Translate

The Netherlands' new wind tariff system encourages fraud. This was the unequivocal message given to junior minister Joop Wijn by Vestas-Nederland at the ceremonial inauguration of the first Vestas turbine installed on Dutch soil in 2003, an 850 kW, V52 at Zeewolde in the province of Flevoland.

While the revised Environmental Electricity Production (MEP) tariffs of EUR 0.049/kWh onshore and EUR 0.068 offshore have been generally well-received, industry concern that the subsidy should end after the first 18,000 full-capacity hours or ten years, which ever comes sooner, has led to intense lobbying. Vestas' Dutch division is the latest to weigh into the debate.

"This is a very serious issue which I don't think the government really understands," says Rob Tomesen at Vestas-Nederland. "The current proposal to award the MEP subsidy for the first 18,000 full capacity hours is a formula for inefficiency and fraud. It effectively discourages manufacturers from designing efficient machines for inland, low-wind speed locations," he continues.

Market distortion

"Under the full-capacity hour system, the bigger the generator, the more subsidy you will get, irrespective of the number of kilowatt hours generated. For example, if we replaced the 2 MW generator in our V80 with a 3 MW model, the machine wouldn't produce a single kilowatt hour more, but the owner would receive one and a half times as much subsidy. That's because a full-capacity hour is the annual production of a wind turbine divided by its generator capacity." He fears the market could become badly skewed.

"Obviously this will encourage people to put as big a generator as possible into their turbines in order to collect the most subsidy possible without any addition to the number of kilowatt hours produced. You even have the situation where turbines which produce less green electricity would attract more subsidy."

Tomesen feels the junior minister must understand that modern turbines are designed to work for 20 years. "By ending the MEP subsidy after ten years, he is encouraging people to pull their turbines down after only half their working life. Again, this discourages manufacturers from improving their designs."

Missed the point

Nonetheless, Tomesen has faith in the junior minister's goodwill. "We know that the new regulations were drawn up in a hurry and that the politicians are being asked to process a lot of information very quickly, and we believe that they simply have not understood this point."

On December 19, the Dutch parliament passed a motion calling for a review of the new system so that it better differentiates between the profitability of turbines in different regions. Tomesen hopes that Wijn will act on this recommendation and that this time the various market players will be involved in the study.

Instead of the MEP, Vestas-Nederland is asking the Dutch government to borrow an idea from the German fixed tariff system. The German fixed rate of pay for wind power assigns every turbine model a reference value based on its production in winds of 5.5 m/s at a height of 30 metres. A sliding tariff and time scale then reflects a site's relative productivity. The same concept could be applied as much to a production incentive as a tariff. "This is a much better system as it encourages manufacturers to design machines for all sorts of locations," says Tomesen.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in