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National Support Mechanisms for Co-Generation in the Netherlands

This presentation highlights the current support mechanisms for co-generation in the Netherlands, focusing on investment and exploitation support such as the Energy Investment Deduction (EIA) and the SDE subsidy program. It outlines the criteria for eligibility, including installed capacity and efficiency requirements, as well as the benefits of reduced grid charges and energy tax exemptions. Despite its potential for energy savings and CO2 reduction, the presentation notes the marginal growth of co-generation currently limited to sectors like horticulture.

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National Support Mechanisms for Co-Generation in the Netherlands

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  1. “CODE meeting April 28” National support mechanisms in the Netherlands WK Platform (Co-generation Platform) Peter Steenbergen www.cogen.nl

  2. Content • Co-generation in the Netherlands • Investment support (EIA) • Exploitation support (SDE) • Grid charges • Energy tax exemptions • ETS

  3. Co-generation in NL

  4. Co-generation in NL (2)

  5. Investment support • Energie Investerings Aftrek (EIA) • Tax credit: extra depreciation • 44% of the investment sum • Company tax rate 25,5% • Effectively: 44%*25,5% = 11,22% • Minimum “Senter-efficiency”:2/3 heat efficiency + electrical efficiency

  6. Investment support (2)

  7. Exploitation support (SDE) Part of the subsidy arrangement for renewables For who? • Only CCGT • Installed capacity at least 150 MWe • H/P-ratio at least 0,6 at max heat production • Primary energy savings at least 10% • Natural gas fired (at least 90%) • Heat for industrial use (at least 90%) • Green field Who is left???

  8. Features SDE • Covers 100% of the Onrendabele Top (OT), “guarantees” 7% ROE • 12 years • Remuneration adjusted every year on the basis of actual forward energy prices (electricity, natural gas en CO2) • Maximum remuneration • Only applicable to CHP-electricity according to EU directive

  9. Features SDE (2) • Tender procedure • Available € 168 mln in 2010 for 12 years • € 14 mln/year • Potentially enough for 250 MWe Idle hope for extension to other categories

  10. Grid charges • Special (lower) grid charges at higher voltage levels for back-up power (< 800 h) • No kWh or capacity charges, neither for co-generators nor for electricity producers • Arrangement for avoided grid lossesended because of lack of sufficient legal basis

  11. Energy tax exemptions • Electricity, for own use • From renewables • From CHP – “Senter efficiency” > 60%Senter: e-efficiency + 2/3 heat efficiency • Natural gas • Electricity generators • Electrical efficiency > 30% (en >60 kW) • No comparative advantage for CHP

  12. Energy tax on natural gas • Tax rates in 2010 (in ct/m3) • 0 - 5.000 m3 16,29 • 5.000 – 170.000 m3 14,11 • 170.000 – 1 mln. m3 3,91 • 1 – 10 mln. m3 1,24 • > 10 mln. m3 0,82 • 1 m3 = 35,17 MJ (HHV) = 9,77 kWh • Per grid connection per year

  13. Energy tax on electricity • Tax rates in 2010 (in ct/kWh): • 0 - 10.000 kWh 11,14 • 10.000 – 50.000 kWh 4,06 • 50.000 – 10 mln kWh 1,08 • > 10 mln 0,05“benchmark companies” 0,00 • Per grid connection per year

  14. ETS • Small advantage in ETS II • ETSIII ???????????

  15. Present situation • No big stimuli in The Netherlands for co-generation • Although acknowledgement of big contribution to energy savings and CO2-emission reduction • Co-generation only a marginal business, growth purely in horticulture

  16. ? Cogen Nederland Peter Steenbergen Peter.steenbergen@cogen.nl www.cogen.nl 06-51064603

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