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

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

Co-generation in NL

Co-generation in NL (2)

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)

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???

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 CO 2 ) 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 losses ended 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/m 3 ) – m 3 16,29 –5.000 – m 3 14,11 – – 1 mln. m 3 3,91 –1 – 10 mln. m 3 1,24 –> 10 mln. m 3 0,82 1 m 3 = 35,17 MJ (HHV) = 9,77 kWh Per grid connection per year

Energy tax on electricity Tax rates in 2010 (in ct/kWh): – kWh11,14 – – kWh 4,06 – – 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 CO 2 - emission reduction Co-generation only a marginal business, growth purely in horticulture

Cogen Nederland Peter Steenbergen ?