In the Netherlands, wind energy is an essential source of renewable energy. Wind produces about 50 percent of the renewable electricity. For this market, Rabobank shares recent figures and trends.
Lots of potential thanks to low cost
Due to the low cost rate in windy areas, there is still a lot of promise. Wind energy, however, is (still) entirely dependent on subsidies for profitable exploitation. The government has SDE + (Sustainable Energy Promotion) for this in the Netherlands.
Determining factors for the growth of this sector are licensing and subsidy policies.
Amount of turbines for wind
In the Netherlands, there are more than 2,200 wind turbines with an installed capacity of approximately 4,305 megawatts (MW), of which 959 MW are at sea. The goal of the Dutch government is to raise the installed capacity to 6,000 MW by 2020.
Economy
Overcapacity of power plants increased sun generation of electricity and wind stagnation of electricity demand
The cost of imbalances will increase with an increase in wind and solar energy.
Wind energy is one of the cheapest sources of renewable energy and the technology is adequately developed.
Sustainable nature and the relatively low cost of wind energy provide this sector with “the wind in the sails”.
Wind at sea
To achieve sustainable energy goals, offshore wind is needed. The government needs to release a 2015 offshore wind subsidy proposal, so that, despite a slightly higher cost, sufficient projects can be carried out.
Government sustainability ambition
The government has strong ambitions to promote more renewable energy, and in the coming years, it will recognize areas where wind power will grow .
Durability
More mandatory action is being taken by the national government against municipalities. In addition, the government acknowledges that in order to achieve the goals, smaller efforts would also be required.
Local governments also have a sustainability target in which wind energy plays a prominent role on a regular basis.
Innovation
The height of the shaft, the diameter of the rotor and thus the wind turbine’s power are still rising. With a tip height of 198 meters, the largest turbines in the Netherlands have a power of 7.58 MW.
Further advances in technology would have to ensure that wind is permanently competitive with other sources of renewable energy.
Society
A careful process in which attention to the environment is critical is the discovery of suitable locations on land.
Governments also want the fractured landscape to be removed and legislation modified accordingly. The pattern is line arranging.
People are becoming more vocal and therefore better organized to campaign against wind turbines.
The consequence is that it takes longer to arrive with permits.
Via wind projects built by private individuals and/or entrepreneurs, wind energy is more often generated locally.
Laws and regulations
Grants for fifteen years are released. It is, however, a lengthy and expensive process to obtain permits; licensing processes take several years on a regular basis.
If a permit is issued, the relevant subsidy policy determines if the project is profitable.
The new subsidy strategy prioritizes renewable sources of energy priced at the lowest cost.
The subsidy program will be extended to rise from the current share of renewable energy from 5 percent to 14 percent in 2020 (and 16 percent in 2023).
“Due to the increase in the share of wind energy, matching supply and demand is becoming increasingly challenging.”
Significance for the user
Supplying Wind
The wind supply decides a wind turbine’s potential energy yield. Specialized consultancies quantify this wind supply and display it in a wind report.
A wind report contains:
Environmental conditions and properties of wind speed are projected to achieve annual energy yields from the wind turbine.
For financing, an independent wind report is needed.
Infrastructure
The power generated by the wind turbine and the distance to be covered depend on the link to the public electricity grid.
Turbine size
In different characteristic dimensions, the scale of a turbine can be indicated. The most critical feature is the capacity of the electric generator, expressed in megawatts.
The shaft height and the rotor diameter, both expressed in meters, are other functions.
Owing to technical advances and higher masts, the output produced per new turbine has increased dramatically.
A modern 3 MW turbine can produce 6,000,000 to> 9,000,000 kWh of electricity per year, depending on the region.
This is adequate to provide electricity to approximately 2000 households. Rabobank was the first in the Netherlands to fund a 7.5 MW wind turbine in 2010.
There is a trend towards larger rotor diameters so that with the same generator power, more energy can be produced.
There is always a rotor diameter of 100 meters or more in a modern wind turbine. Shaft heights also rise, as at higher altitudes, the wind blows faster and more frequently.
The latest wind turbines are 80 to 120 meters in shaft height and 90 to 120 meters in rotor diameter.
Netherland’s assessment framework
A wind turbine’s yield depends on a variety of factors.
Location: the wind blows more and faster on the coast on average than farther inland.
The average running time of the turbine: a wind turbine supplies energy from wind force 2, at wind force 6, reaches its full output potential and is shifted down when wind force exceeds 10.
This is to avoid overloading. Turbine height: the wind blows faster at higher altitudes and the wind flow is less turbulent.
Rotor blade length: a longer rotor blade allows more square meters to get energy from the wind. Design of the wind turbine.
Recognized turbine suppliers
NordexAlstomLagerwey of VestasEnerconSenvion
With these parties and the wind turbines, Rabobank has experience.
These parties often issue different performance guarantees that are necessary for financing approval.
Critical Success Factors
Government policy: the subsidy for the SDE adjusts quarterly.
However, if a subsidy has been made available, it can not be adjusted afterward. Energy prices: the price of electricity has an impact on turnover.
Investment amount: partially determines the amount of the funding. Location: determines the supply of wind and thus output.
The volume of wind: has decreased for a number of years, but may increase again unexpectedly.
When and what prompted the decrease is unknown.
Entrepreneur
For most entrepreneurs, wind energy is a new practice.
In the preparatory process and development phase, high demands are imposed upon entrepreneurship. (Limited) entrepreneurship or craftsmanship is required during the production of oil.
Consider, for instance, turbine management and contracts. It is of great importance to providing financial analysis and insight into legislation and regulations.
Company
There is minimal new construction of solitary turbines due to legislation in the field of spatial planning. The turbine capability is continually growing.
They also form part of a ‘project’ in which turbine arrangements are introduced in the form of parks and line arrangements.
As a consequence, collaboration forms are pursued.
Together with colleagues, landowners can set up a group, but also options such as granting an operator a building right.
It is necessary to have a preferred legal form with an accompanying tax regime.
Marketing
Besides the infrastructure, in order to be able to sell electricity, a purchasing contract is necessary.
In the Netherlands, the grid has priority over the selling of renewable energy.
In general, investments in infrastructure are needed to feed electricity into the grid due to the large scale of the projects.
Matching supply and demand is becoming more difficult because of the growth in the share of wind energy.
Electricity is produced more and more locally, which puts on the electricity grid different demands.
In the coming years, significant improvements in the grid will be required throughout Europe.
The installed capacity has risen rapidly in the Netherlands since 2002.
Significant growth is anticipated for 2020 in order to meet the 6,000 MW goal. Inside Europe, the front runners are Germany and Spain. With 546.8 GW in 2017 and estimated growth of 800 GW in 2021, China is the fastest-growing business worldwide.
There were approximately 2,200 wind turbines with a total capacity of approximately 3,182 MegaWatt in the Netherlands in mid-2016. 124.60 MW (2014: 175 MW) of wind energy was introduced on land in 2015. Wind energy in other European countries is already being produced on a large scale. Over 486,790 MW of wind turbine capacity was installed globally in 2016. (this was 432,680 MW in 2015).
Revenue
For some time, electricity prices have been under pressure because of:
Decreasing oil and coal prices increasing Germany’s clean energy supply improved interconnectivity with foreign countries
For 2018, a price decrease is expected. In particular, because of Europe’s growth in renewable electricity and gas.
What customers will understand about this depends on the taxes. Next year, the ODE (sustainable energy storage) will, as expected, go from EUR 60 to EUR 100 per year.
Subsequently, in the coming years, the ODE will further increase to EUR 200 per year in 2020.
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