This year, the national subsidy fund for sustainable energy projects will probably be largely claimed by projects for CO2 storage under the North Sea. But due to the high CO2 price, they currently do not need that subsidy at all, while other projects are falling by the wayside, experts tell NU.nl.
This year, a total of 12 billion euros in subsidies were received applied for via the so-called SDE++ scheme, which can be used for CO2-saving projects such as solar parks, wind turbines and biogases. More than half of the applications were for CO2 capture and storage (CCS) by heavy industry, the outgoing cabinet reported last week.
The subsidy scheme gives priority to the cheapest ways to reduce CO2 emissions. Because CO2 capture provides large and relatively cheap savings, CCS projects will probably claim more than half of the subsidy pot. A total of 5 billion euros is available.
But with the current CO2 price under the European emissions trading system – more than 80 euros per tonne – emitting is often more expensive than storing CO2. “That means that not much subsidy is needed at all,” says André Faaij, scientific director of TNO Energy Transition. It's exactly how the carbon price is supposed to work, after years of having little effect.
'Sustainable heat falls by the wayside'
When awarding subsidies, an old estimate of the CO2 price is used, which will only reach 2030 euros per tonne of CO45 in 2. As a result, subsidies will be allocated to projects that have little or no need for them. If the CO2 price remains high, these subsidies will not be paid out, but will end up in government reserves. “That's a shame, because you can now make more progress with the same money,” says Faaij.
Peter de Jong, program leader of sustainable energy production at Natuur & Milieu, also finds the situation worrying. “CCS will claim a very large part of the subsidy budget. It may well be that only a very limited part of that subsidy has to be paid out, but that does mean that many techniques that are needed to make other sectors more sustainable fall by the wayside.”
There will probably now be no subsidies available for technologies such as geothermal energy and industrial heat pumps. These techniques for sustainable heat are still in their infancy and are a lot more expensive.
“It is precisely these techniques that we must support with government subsidies,” says Christian Union MP Pieter Grinwis. He called into one earlier this year motion to make better use of the subsidy money, including by taking the rising CO2 price into account. According to a spokesperson for the Ministry of Economic Affairs and Climate, it is not legally possible to take a more recent CO2 price into account when awarding subsidies.
'Reform comes too late'
The outgoing cabinet wants to change the subsidy scheme as of 2023, so that money is made available for sustainable energy projects that cost more money.
That is too late, says Olof van der Gaag, director of the Dutch Sustainable Energy Association. “In fact, making that heat more sustainable is our utmost interest. If you delay sustainability for another two years, you will already be too late to achieve the goals for 2030.”
Source: Nu.nl
