“CODE meeting April 28”

National support mechanisms in the Netherlands

WK Platform (Co-generation Platform)

Peter Steenbergen

www.cogen.nl

Content

• Co-generation in the Netherlands

• Investment support (EIA)

• Exploitation support (SDE)

• Grid charges

• Energy tax exemptions

• ETS

Co-generation in NL

Central Decentral Total Central Decentral Total TotalGasengines 0 3.481 3.481 0 9 9 3.490Steamturbines 1.944 691 2.635 6.548 357 6.905 9.540CCGT 3.250 2.413 5.663 2.080 0 2.080 7.743Gasturbines 171 895 1.066 212 0 212 1.278Nucleair 0 0 0 510 0 510 510Water 0 0 0 0 37 37 37Wind 0 0 0 0 2.121 2.121 2.121Solar 0 0 0 0 57 57 57Other 0 25 25 8 47 55 80Totaal 5.365 7.505 12.870 9.358 2.628 11.986 24.856

Installed capacity in MWe end 2008

Co-generation not in co-generation

Co-generation in NL (2)

Central Decentral Total Central Decentral Total TotalGasengines 0 13.053 13.053 0 21 21 13.074Steamturbines 10.132 3.019 13.151 24.944 1.925 26.869 40.020CCGT 16.359 13.067 29.426 11.067 0 11.067 40.493Gasturbines 829 4.943 5.772 71 0 71 5.843Nucleair 0 0 0 4.169 0 4.169 4.169Water 0 0 0 0 102 102 102Wind 0 0 0 0 4.256 4.256 4.256Solar 0 0 0 0 38 38 38Other 0 68 68 0 139 139 207Totaal 27.320 34.150 61.470 40.251 6.481 46.732 108.202

Co-generation not in co-generation

Electricity production 2008 in GWh

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

Investment support (2)

Category Max subsidy Min efficiency

Engines up to 60 kWe € 1.500/kWe 70%

Engines 60 kWe up to 1 MWe € 600/kWe 70%

Engines > 1 MWe € 350/kWe 75%

Other installations up to 150 MWe € 600/kWe 70%

Exploitation support (SDE)

Part of the subsidy arrangement for renewablesFor 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 fieldWho is left???

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

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

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

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

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

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

ETS

• Small advantage in ETS II

• ETSIII ???????????

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

Cogen Nederland

Peter Steenbergen

Peter.steenbergen@cogen.nl

www.cogen.nl

06-51064603

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