Spring letter: Six new rounds of SDE++ and distribution of Climate and Energy Fund
Money will be made available for six new rounds of the SDE++ from 2027. This was announced in the accompanying spring letter climate and energy to the Draft Multi-annual Programme Climate and Energy Fund 2027 by Stientje van Veldhoven-van der Meer, Minister of Climate and Green Growth. In addition, the minister makes proposals for the Climate and Energy Fund to take a number of measures, including accelerating high-voltage projects to combat grid congestion.
It is up to the Upper and Lower Houses to cast their votes on the proposed plans from the Draft Multi-Year Programme. The final distribution will be shared on Budget Day.
New SDE++ rounds
In the spring letter, Minister Veldhoven-van der Meer confirmed the coalition agreement's plans to open up six more rounds of the SDE++. “The cabinet is reserving budget for six new rounds of €8 billion for the Stimulation of Sustainable Energy Production and Climate Transition (SDE++) from 2027, so that the roll-out of the energy transition and the sustainability of industry can continue,” the minister said.
No SDE++ for solar parks
Although the cabinet formally extends the SDE++ until 2032, the content of the scheme will be split. For renewable electricity, especially solar parks and onshore wind, the SDE++ will be replaced by contracts for difference (CfDs), influenced by European regulations. This is because from 2027, according to the EU, renewable electricity generators such as solar parks and wind turbines will no longer be allowed to receive support through the SDE++ to avoid price signals being distorted by the subsidy.
However, the SDE++ will continue to exist for other CO₂-reducing technologies, such as heat, hydrogen and industrial sustainability.
That this shift is already taking concrete shape was shown earlier in the 20 March parliamentary letter, in which the minister indicated that solar projects smaller than 200 kilowatt-peak would also fall outside the new CfD system from 2027 onwards, because, according to the cabinet, they are profitable without subsidies.
Distribution of money for climate and energy
The Draft Multi-Annual Programme 2027 shows that €809 million in funds will be allocated directly, in addition to €5.5 billion in conditional allocations. It follows that €21 billion remains in the fund. It also follows from the overview that of the total remaining funds of 13.5 billion have not yet been earmarked for any specific measure. However, it is known that, in accordance with the coalition agreement, most of this is earmarked for nuclear energy (€13.1 billion).
Energy infrastructure awards
The awards under the energy infrastructure heading include the Hystock project, which provides for the realisation of the first underground hydrogen storage in the Netherlands with four caverns in Zuidwending. The project will receive up to €287.5 million in additional conditional financing, on top of the €162.5 million previously awarded, to cover risks around permits, cushion gas prices and storage filling.
A further €20 million is conditionally granted to Electric Road Systems (ERS), a technology that allows electric trucks to be charged while driving via a conductive overhead line. The funds are intended for the construction of two sections in the Netherlands, on the corridors Rotterdam-Antwerp and Rotterdam-Germany (A15/Betuweroute).
The Stopcontact op land programme, which provides for the construction of connections and fast-charging infrastructure at service stations along the main road network, sees an allocation of €65.5 million. In doing so, the State will take on the construction and management to limit grid aggravation and meet growing charging demand and European regulations (AFIR).
Tackling grid congestion
Under the heading of grid congestion, several measures aimed at speeding up grid expansion and shortening lead times are proposed. For instance, 41.5 million euros will be allocated for area investments in the high-voltage grid (in addition to 8.5 million euros for Moerdijk), which will be used for 25 urgent projects to deploy additional direction and area compensation to save up to 18 months of time. In addition, €15 million will be freed up to set up a task force for medium-voltage projects to reduce the lead time of these projects by 12 to 18 months.
These measures are in line with the government's broader commitment to tackling grid congestion. As Van Veldhoven-van der Meer states in her letter, “Where infrastructure lags behind, the government takes the lead. Thus, it is top priority for this cabinet to reduce grid congestion and thus offer prospects for citizens, social institutions and companies to be able to get a connection.”
Long-term battery storage and flexibility
For the scale-up of innovative long-term electricity storage, a reservation of €158.4 million remains in place. This measure focuses on the development and scale-up of alternative storage technologies better suited for medium- and long-term storage than lithium-ion batteries, which are mainly limited in storage capacity. As research to support demonstration projects (LDES) is ongoing and not expected to be completed until 2027, the reservation will be maintained and possibly further developed towards the 2028 plan.
In addition, €198.9 million is set aside for industrial demand side response (iDSR), aimed at increasing flexibility on the demand side of the electricity system. The measure provides subsidies for flexibility scans, process adjustments and investments in flexibility at industrial parties, among others. The scheme is still under development and needs further elaboration, including in line with existing instruments such as the Flex-E scheme, with additional conditions and the precise details of the subsidy still to be determined.
According to the minister, the aim of the investments is not only for generating renewable energy, but also to invest in our own economy and independence. “An energetic transition with an integrated approach to a sustainable society is the best way for the Netherlands and Europe to maintain our economic strength,” she states in the spring letter.
Source: Solar365
