Applications & Installations

Negative energy price drives loss of Netherlands solar incentives

Negative energy prices for more than six hours mean the Dutch government will pay no renewables incentives under its SDE+ program for March 29. The plunging electricity price was caused by slumping demand for energy as restrictions were put in place to help prevent the spread of Covid-19.
Emiliano Bellini
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Emiliano Bellini
A sustained negative electricity price nullifies top-up incentive payments for renewables in the Netherlands. | Image: MabelAmber/Pixabay

Dutch enterprise agency the Rijksdienst voor Ondernemend Nederland (RVO), which manages the SDE+ incentive program for large scale renewables, has revealed it will not pay incentives to solar and wind power plants for March 29 because of negative electricity prices.

The state body said prices on the day-ahead wholesale energy market were negative for more than six hours on the Sunday in question. Exceeding the six-hour window triggers non-payment of SDE+ incentives, the RVO said.

The negative prices were triggered by a slump in demand associated with measures imposed by the Dutch government to attempt to restrict the spread of Covid-19.

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That payment clause applies only to larger projects – solar assets with a generation capacity of more than 500 kW and wind farms with more than 3 MW and, in addition, only affects facilities which applied for incentives after December 1, 2015.

“The electricity that has been fed into the grid by owners of large solar roofs and solar parks during the period of the negative electricity price does not count as eligible production and is therefore not eligible for SDE+ subsidy,” the RVO stated.

The SDE+ program provides payments to bridge any gap between the cost price of generating clean energy – a figure supplied by developers for their facilities – and the day-ahead wholesale electricity price. Payment contracts last eight, 12 or 15 years, depending on the maximum full load hours offered by projects.

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May 13, 2020

[…] Plunging power prices, exacerbated by bumper volumes of solar power pose a risk of undermining the business case of renewables projects, particularly unsubsidized merchant facilities, Solargis added. The company has used the unique insight offered into future grid operation to stress how important it is for renewables investors and grid operators to possess up-to-date data of the type gathered by Solargis. […]

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