(With video) When the Dutch Government awards subsidies for offshore power, it bases the subsidy on a base energy price. During the Wind Days 2016 in Rotterdam, NWEA spokesperson Hilbert Klok stated abolishing this base energy price could make offshore energy much cheaper.
Current Dutch subsidies are granted through the SDE+ (Stimulering Duurzame Energieproductie/Encouraging Sustainable Energy Production) programme. Production of renewable energy is not always profitable, because the cost price is higher than that of energy derived from fossil fuel.
The difference in cost price is called the unprofitable component. SDE+ compensates producers for this unprofitable component for a fixed number of years, depending on the technology used. This makes the level of the SDE contribution dependant on energy-price developments.
When the energy price is high, subsidies are lower, but the energy consumer makes up for this by paying more. When the energy price is lower, the SDE+ pays more and the energy consumer less. The correction amount is the average energy price per category during the year of production.
The base energy price is the lower limit for the correction amount. The maximum grant is reached when the correction amount is equal to the base energy price. The final payments are calculated per year on the amount of energy produced and the actual energy price.
Base Price Causes Higher Tender Bids
Now, NWEA spokesperson Klok has said that it is precisely this base energy price that is one of the things standing in the way of making offshore wind energy cheaper. He says the base energy price poses a risk to the companies that operate offshore wind farms. They will cover this risk in their tender bids, causing a higher price. He goes on to point out that although this may call for a higher subsidy when energy prices are extremely low, in the long run, building and operating offshore wind farms will be cheaper without a base price.
Watch the full interview with Klok at the Wind Days 2016 on 15-16 June below (in Dutch only).
