With SDE+ the ministry of Economic Affairs aims to encourage the production of renewable energy in the Netherlands. Renewable energy is better for the environment, makes the Netherlands less dependent on fossil fuels and is beneficial to the economy.
Renewable energy is generated from clean, inexhaustible sources. This is why it is called ‘renewable energy’.
What is SDE+
The SDE+ (Stimulering Duurzame Energieproductie/Encouraging Sustainable Energy Production) is an operating grant. Producers receive financial compensation for the renewable energy they generate. Production of renewable energy is not always profitable because the cost price of renewable energy is higher than the market price. The difference in price is called the unprofitable component. SDE+ compensates producers for this unprofitable component for a fixed number of years, depending on the technology used.
The SDE+ is available for the production of:
- renewable electricity
- renewable gas
- renewable heat or a combination of renewable heat and electricity (CHP)
The primary target groups for SDE+ are companies, institutions and non-profit organisations. The project must be realised in the Netherlands. The national government is excluded from participation. Private producers of renewable energy are not eligible for a SDE+ grant because the costs exceed the benefits. Other local or national incentive regulations sometimes apply.
There are two rounds of SDE+ applications in 2017. The SDE+ round of applications for spring 2017 is closed. The autumn round is expected in September or October 2017.
The cost price for the production of renewable energy is set in the base sum for the technology. The energy price is established in the correction sum. The SDE+ contribution = base – correction sum. This makes the level of the SDE+ contribution dependant on energy-price developments. When the energy price is high, you receive less SDE+ and more from your energy consumer. When the energy price is lower, you get more SDE+ and less from the energy consumer. 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.
The Stimulation of Sustainable Energy Production Decision (Besluit SDE) allows for the possibility of banking. This means unused production which is subsidised can be used in later years (underproduction). In addition, producers can also carry over any excess output (i.e. renewable energy generated over and above the maximum subsidisable annual production) to a following year (overproduction). This can be used if production is lower than expected in a later year. The latest form of banking is maximised to 25% of the subsidisable annual production. This ruling applies to all projects with the exception of wind projects where the wind factor provides an alternative to banking in covering the operator's risk of losing out on subsidy.
Alternative banking rules are applied to:
- Offshore wind energy;
- Categories involving co-gasification and co-firing of biomass in coal-fired power stations.
The banking system is explained in an infographic.
More information in Dutch: Stimulering Duurzame Energieproductie (SDE+)
The Netherlands Enterpise Agency carries out SDE+ for the Dutch Ministry of Economic Affairs