By Rubina Obaid
Dutch government has announced to double its planned budget for the country’s renewable energy subsidy program to $4.5 billion in 2020, as part of its efforts to cut greenhouse gas emissions by 25% by the end of this year.
Dutch energy sector heavily relied on gas reservoirs but with dwindling natural resources, the country is trying to move towards renewable energy sources to meet its energy demands. Although, Netherland is famous for its windmills, yet the country is left behind as compared to most of its European peers in renewable energy production. Therefore, the state has undertaken prompt action for the enormous task of swift transformation to renewable. Hence, the Dutch Government announced to double its contribution to renewable power subsidies from $2.17bn to $4.34bn, also to align with European climate change targets. One of the major objectives is to cut down the carbon emission by 55% by the year 2030, to achieve climate neutrality goals.
Dutch minister for economic affairs and climate policy, Eric Wiebes announced that the budge is in its final phase of the Stimulation of Sustainable Energy Production (SDE+) scheme. The scheme came to an end after almost a decade of financial support for renewable projects and it has been replaced by a broader policy framework. However, the renewable energy subsidy drive from all around the world reflected the approach as an effective measure when backed by government funds; for the successful implementation of the desired framework.
The state funding model is comprised mainly on two parts, the first one that has just been closed and the successor scheme that will work for the expansion. The first scheme was implemented in the year 2011, to support renewable energy transition that included biomass, wind energy, geothermal and solar power. The project funded 5823 MW of newly installed energy capacity, in the first seven years of the scheme. Out of the total energy production, 3185 MW was used for electricity generation, the data revealed by the study conducted by Catapult Energy Systems and the Energy Technologies Institute. The report further discovered that less than 15% of funded projects were considered “free riders” those that would have been realized without the support of SDE+. Highlighting the importance of the projects became the major hindrance to financial barrier in the installation of renewable power.
SDE+ is considered as a productive tool for complimenting the similar renewable framework schemes across Europe. In parallel contrast between Dutch projects such as the EU emission trading system, as both aim to improve the EU’s environmental performance. However, there are opposing targets between the two, as the EU scheme aims to reduce greenhouse gas emissions by 21% by 2020, whereas SDE+ targeted a 16% increase in renewable energy generation by the year 2023. Keeping a strong emphasis on energy generation rather than only focusing upon carbon reduction, along with aiding the entire project with technological advancement that greatly helped the Dutch set a standard for proactive change in the energy sector. Earlier this year Wiebes announced a revised plan that is SDE++, which will cover much more of the same ground of active transformation towards renewables. In addition to the prevailing ground, it will further open up to a greater range of projects for carbon emission reduction in any capacity.