Stimulation of Sustainable Energy Production (SDE+)

The SDE+ (in Dutch: Stimulering Duurzame Energieproductie) 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).

For energy produced with biomass, there is a system of controls in place to ensure that it meets criteria for sustainability.

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.

For those interested in applying to SDE+, it is worthwhile to read the four cornerstones of the subsidy to be aware of how the application process runs and what applicants may expect. There is also a step-by-step guide to help you with your application.

The SDE+ 2019 will have two rounds for subsidy applications: Spring and Autumn. The SDE+ round of applications for spring 2019 is closed. Minister Wiebes will announce his plans for the autumn round by July 2019.

Budget

The spring budget totals €5 billion.

*Renewable gas does not fully contribute to the European sustainable energy objectives. The phase limits for gas therefore deviate from the phase limits for electricity and heat by a factor of 0.706. As a result, the projects will compete on the basis of their contribution to the objective.

Expanding  SDE+

From 2020, the SDE+ stimulation scheme will be expanded: an incentive for sustainable energy transition (SDE++). The SDE++ will stimulate the roll-out of sustainable energy and CO₂-reducing techniques by compensating the difference between the cost price and the market value: the non-profitable component of these techniques. This will be done by an operating subsidy.

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 is base minus correction sum. This makes the level of the SDE+ contribution dependent on energy-price developments. When the price of energy is high, you receive less SDE+ and more from your energy trader. When the price of energy is lower, you get more SDE+ and less from the energy trader.

The correction amount is the average price of energy per category during the year of production. The base price of energy is the lower limit for the correction amount.

The maximum grant is reached when the correction amount is equal to the base price of energy. The final payments are calculated per year on the amount of energy produced and the actual price of energy.

The Stimulation of Sustainable Energy Production Decision (Besluit SDE) allows for the possibility of banking. This means that in case of less sustainable energy production than the estimated annual production, the difference can be used in later years (underproduction). In addition, producers can also carry over any excess output (this means that renewable energy is generated over and above the maximum subsidisable annual production) to a following year (overproduction). This can be used if production is lower than estimated 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+). Every year, the Netherlands publishes information brochures about the various rounds of SDE+ applications. The brochures SDE+ Spring 2019 is expected in March 2019. You can also consult renewable energy reports here that outline the Netherlands' ambition of 16% renewable energy by 2023.

The Netherlands Enterpise Agency carries out SDE+ for the Dutch Ministry of Economic Affairs and Climate Policy.