Review of the Dutch SDE plus Renewable Energy Scheme

In the National  Energy Agreement it was agreed that there needs to be a substantial increase in the share of renewables in the energy mix. At the moment the main policy instrument to this end is the SDE+ Renewable Energy Incentive Scheme. This compensates the difference between the cost price of a renewable energy project and the market value of its energy output: the so-called ‘inefficient top’. In this way the SDE+ scheme seeks to incentivize the roll-out of renewable energy technologies.

In this study, commissioned by the Dutch Ministry of Economic Affairs, CE Delft and SEO Economisch Onderzoek review the efficacy and cost-effectiveness of the SDE+ over the period 2011-2015. The overall conclusion is that this instrument is better designed than the preceding subsidy schemes MEP and SDE. Without SDE+-funding, much of the output from SDE+-subsidized projects would probably not have materialized. There is potentially scope for improving implementation of the scheme, though: among other things, more allowance could be made for the specific characteristics of the various biomass markets.