• Client: Dutch Ministry of Economic Affairs and Climate Policy (EZK)
  • Implementation period: 2019 - 2019 (Ongoing)
  • Geographic coverage: The Netherlands

How will the SDE+ subsidy scheme be expanded to meet the Dutch climate goals?

In May 2019, the Netherlands adopted the national Climate Law which transposes the international Paris Agreement into national climate goals. Following the Climate Law (klimaatwet), the Netherlands is committed to reduce its Greenhouse Gas (GHG) emissions by 49% compared to the 1990 levels in 2030 and by 95% in 2050. The concrete policy measures through which objectives should be achieved have been formulated in the Dutch Climate Agreement (klimaatakkoord), which was presented in June 2019. One of the key policy measures to meet the climate goals is the expansion of the Stimulation of Sustainable Energy Production (SDE+) subsidy scheme.

The SDE+ instrument stimulates the deployment of renewable energy by providing a feed-in premium. In order to obtain a subsidy, different technologies compete on the basis of their energy production cost. With about € 1 billion cash expenditures per year, it is one of the essential policy tools to facilitate the energy transition. In the renewed subsidy scheme (SDE++) the scope of the instrument will be broadened from renewable energy projects to greenhouse gas mitigating technologies in general. The Ministry of Economic Affairs and Climate Policy is currently designing the SDE++ instrument, its methodological assumptions and technological scope. Trinomics supports the ministry with the design by assessing the proposed design of the instrument and by delivering policy recommendations for possible improvements to the draft design. The main question is whether the new design will work and whether the cost-efficient characteristic of the current instrument can be maintained.

 

This project is expected to be completed in the coming months.

This investigation provided the following preliminary results:

  • To assess the overall structure and changes in the draft policy design;
  • Assess the interplay with other policies and the internal coherency;
  • Assess the proposed selection of GHG emissions reducing technologies eligible for SDE++; and
  • Assess potential risks to the effectiveness and efficiency of the SDE++.