Challenges and Opportunities in Solar PV in the Netherlands

Column by Rein de Wolff, Senior Project Manager at BLIX Consultancy

As Interim Managers in renewable energy, we support our clients to develop, realize and operate their renewable projects throughout the project lifecycle. As Project Manager, I currently support our clients with the development of a 30 MW and a 45 MW ground-mounted Solar PV project. Large-scale Solar PV is booming in the Netherlands. There are serious ambitions, but in addition, a number of major challenges occur.

Now that offshore wind has been realized without subsidy in the Netherlands, it’s necessary to realize further cost reduction of onshore wind and solar parks in order to continue the energy transition in the Netherlands. I believe that this is possible with the right policies and climate investments, but the specific challenges for these projects are not less significant.

What also stands out is that despite a large number of onshore wind and solar energy projects currently working to an investment decision, specifically the development of substantial new projects is becoming more difficult in the Netherlands. It’s characteristic that the SDE+ subsidy rounds of the spring in 2017 and last spring have not completely been exploited.

For the realization of large-scale solar parks we see three developments that as far as we are concerned, need attention:

  1. Over the past four years, many municipalities have developed ambitious renewable policy objectives. Partly as a result of these policies, many initiatives for new solar parks came off the ground this past year. These developments are still often in stark contrast to the actual necessary volumes, but now the spatial impact is getting clear, it appears to be a difficult assignment for the new municipal councils and stakeholder organizations such as LTO. This sentiment was also evident in the national press and in Council meetings over the last few months.
  2. The cost price of ground-mounted solar energy projects continues to drop and it is expected that this trend continues. On short-term, enhanced by the expected overcapacity of production in China as a result of the cut back in Chinese subsidies. Partly as a result of this drop, the Netherlands Environmental Assessment Agency (Planbureau voor Leefomgeving) has advised to reduce the subsidies for ground-mounted Solar PV in the Netherlands for this fall to 0.99 Euro ct/kWh. We believe that optimal located ground-mounted Solar PV projects are still attainable with these reduced subsidy levels. This however further limits the number of suitable locations on the short-term.
  3. In the last year, we also see that municipalities are becoming more demanding with regard to landscape integration, investigations required for the environmental permit and local participation. We often agree with these requirements, especially to maintain the long-term support for new initiatives. But, this also increases the development costs and the development risk, while the expected return is pressed by the expected reduced SDE+ subsidy. This becomes a challenge, especially for smaller local businesses such as farmers or cooperatives. This, while in my opinion, for example, farmers could be an additional group of developers who have many opportunities to develop ground-mounted ‘solar fields’’ in an appropriate way, with attention for good landscape integration, multiple land use and with local assurance.

Despite all these challenges, with the increasing ambitions of governments, we still see a significant potential for our clients to develop ground-mounted Solar PV and onshore wind farms. However, a professional approach to the development and optimizing design, contracting and thus optimize the business case is becoming more and more important.

All this leaving a heavy job to do for municipalities, provinces and/or possible energy regions as referred to in the Dutch climate deal in the making. It will be a challenge to locally implement the European, rural and municipal objectives, while projects have less financial margin and spatial policy limits the possibilities for developments.