Energy Agreement
On September 6 2013 around 40 Dutch private and (semi-)public parties reached a covenant on the development of renewable growth in the Netherlands: the Energy Agreement. The Energy Agreement implemented a comprehensive climate and energy policy programme aimed at long-term sustainability and set out agreed short to medium-term measures in 10 pillars. One of these pillars was the increase of renewable energy production from the current 4.3% to 14% in 2020. The agreement identified the need for additional wind farm projects to be developed to reach a total of 4450 megawatts (MW) by 2023 (with 1000MW already in place or under construction). The government allocated a maximum of €18 billion to subsidies for renewable energy (SDE+) for offshore wind, commensurate with these targets. The full amount will be committed before 2020 to account for a wind farm construction period of four years.
New bill
On October 16 2014 the minister of economic affairs submitted a legislative proposal for offshore wind to Parliament. The bill implements an important part of the roadmap for reaching the targets set in the Energy Agreement, which the minister presented to Parliament in a letter of September 26 2014. The roadmap provides for the following:
- a new roll-out schedule of 700MW offshore wind capacity per year for five consecutive years;
- an offshore grid ('socket on the sea') planned and operated by TenneT TSO;
- the repeal of previously granted licences;
- newly designated licence areas; and
- a new combined application procedure for a licence and SDE+.
According to the new roll-out schedule, 700MW will be tendered out every year from 2015 (in theBorssele area) to 2019. As a result, in 2020 the total offshore capacity (under construction) will be 3500MW.
The designated operator of the offshore grid, TenneT TSO, will build five standardised platforms of 700MW, each connected to the onshore high-voltage grid by two 220 kilovolt cables. The designation of TenneT as the operator of the offshore grid is part of a separate legislative proposal to amend the Electricity Act 1998 and the Gas Act.
At present, nine licences for the construction of a wind farm are held by five different parties. The bill introduces new licences and the previously issued licences will lapse when the bill enters into force as the result of a transitory provision. The holders of the existing licences will have to participate in the new application procedure.
The bill introduces a new procedure for the designation of wind locations. In the roadmap the minister designated three areas: Borssele, Hollandse Kust Noord-Holland and Hollandse Kust Zuid-Holland. Within these areas, the minister will appoint plots in so-called 'plot decrees'. The plot decree will include the results of the soil survey, the ecological soil survey, the archaeological and cultural heritage survey and other ecological surveys performed by the state. The plot decree must thereby provide sufficient information for private parties to choose the best available technique within the (environmental) constraints applicable and to enable optimisation of their bids for a licence and SDE+
The new licence procedure will be a combined application procedure for SDE+ and the exclusive licence to build a wind farm in a certain licence area. The licence will be granted for a maximum period of 30 years. The licence application must be submitted to the Netherlands Enterprise Agency (acting for the minister) during the period in which the relevant SDE+ application must be submitted. The licence shall be granted to the party which receives the SDE+. Both decisions (licence and SDE+) are taken simultaneously.
The first tender, for 700MW in the Borssele area, is expected to be published in Autumn 2015. The bill is expected to enter into force on July 1 2015.
For further information on this topic please contact Roland de Vlam or Max WF Oosterhuis at Loyens & Loeff NV by telephone (+31 20 578 5785), fax (+31 20 578 5800) or email (roland.de.vlam@loyensloeff.com or max.oosterhuis@loyensloeff.com). The Loyens & Loeff website can be accessed at www.loyensloeff.com
