A new form of financial support is being introduced for companies that generate electricity on a large scale from solar and wind energy. This is a result of European regulations. The government will no longer provide subsidies but will enter into contracts with companies. To regulate this, a new law is being prepared. The government invites entrepreneurs to share their opinions on the first version of the law.
Currently Subsidies for Companies
Companies that generate sustainable electricity with solar panels and wind turbines can currently apply for subsidies from the Netherlands Enterprise Agency (RVO) through the Sustainable Energy Production and Climate Transition scheme (SDE++). This scheme provides financial support when electricity market prices are low. From 2027, this form of support will no longer be allowed under European rules. This applies to the generation of renewable electricity, such as solar energy and onshore wind energy.
Different Type of Support for Solar and Wind Energy
Therefore, the cabinet is working on a new system: two-way contracts (also called contracts for difference) with a fixed price for generated electricity. This system is already used in some other European countries. The cabinet also wants to use two-way contracts for offshore wind energy.
These two-way contracts are intended for large generation installations by companies. They will likely apply to installations with an electrical capacity of more than 200 kilowatts (kW).
Fixed Price for Generated Electricity
A two-way contract is an agreement between the government and a company. There are 2 options: a contract with a fixed price per generated megawatt-hour (MWh) or a contract with an upper and lower price limit. The government then pays the difference to the company when market prices are low. If the market price is higher than the agreed price, the company must pay the difference to the government.
Why is this Change Needed?
The Netherlands wants to generate more sustainable energy, such as electricity from solar and wind. This is important to be less dependent on other countries and to reduce CO₂ emissions.
The way the Netherlands currently arranges this in the SDE++ scheme will no longer be allowed by the European Commission (EC) from 2027. The EC finds that companies benefit too much from high market prices while also receiving subsidies at low prices. According to the EC, this causes overstimulation and unfair competition compared to companies from other countries. Therefore, the EC is introducing new rules in 2027 that apply equally to all European Union countries.
Give Your Opinion on the New Law
The cabinet is working on a new law for this different form of financial support for large-scale sustainably generated electricity from solar and wind. The working title is Law on the Application of Two-Way Contracts for Settling Differences. You can participate in a so-called market consultation. This is possible until 14 November 2025.
When Will the New Law Come Into Effect?
The new law must come into effect in 2027. More information about the exact rules and conditions will be announced in the coming period. Keep an eye on the RVO website for updates.
- Ministry of Climate and Sustainable Growth
