Good working windmills demolished due to governmental subsidy policy

When I saw the news this week I was again very disappointed in our governmental policy regarding sustainability. At first I could not believe this, but it happens to be that because of a certain subsidy it is now financially attractive to replace a good working windmill by a newer one. These “old” windmills are technically in perfect state and could easily work for at least 15 more years, but because of their age - mostly about 10 years - they are no longer eligible for green electricity subsidy. Since it is more beneficial to have a windmill running that is subsidized, it is now cheaper to replace the old mills with newer ones that do get this subsidy. This means that a lot of public money will be wasted because there is no net improvement of sustainable energy gain and additional pollution is caused by the replacement operation. According to the Volkskrant we are now talking about at least 172 big windmills, which will generate a subsidy of 350 million euros^[1]. I’m really asking myself how this policy ever got through, seeing what its consequences are now..

So let’s shortly explain what’s going on here. As we all know the government is putting a lot of effort in achieving the EU20-20-20^[2] energy goals, which inter alia state that 20% of the energy production should be from renewable sources. The Netherland already lowered this figure to 14% renewable energy production in 2020^[3] and even this is unachievable^[4] if the current efforts are extrapolated according to the CBS (Statistics Netherlands). To illustrate this: in 2012 the renewable energy production was only 4,4%^[5]. The problem here is that the government has only a few means to actually change the way energy is produced. Most policy is built around subsidies because they have the fastest results, but as one can see, this does not always lead to sustainable solutions.  

The topic of this week was: “from vision to practice”, and I think this news item is a perfect example that shows what can go wrong during this process and the huge challenge the government is facing by making European agreements. Although the government is trying their best to make changes, the energy market itself should also come up with initiatives and not only take action if there’s a financial benefit. This might require a different policy and thus the government should reconsider what role they have to play in the process and come up with an effective policy regarding renewable energy production that is less subsidy based.

Thankfully the Ministry of Economic Affairs announced that this subsidy program will be changed in 2015 so that it will no longer be financially attractive to replace and older windmill with a newer (identical) one. But in my opinion this is already too late; every operator that currently has these old windmills would be crazy to not make use of the subsidy, so I think the government can expect a lot of extra applications before the end of the year…

- Jesper

[1] http://www.volkskrant.nl/binnenland/nog-goede-windmolens-worden-vervangen-vanwege-subsidiestop~a3791781/
[2] http://ec.europa.eu/clima/policies/package/index_en.htm
[3] http://www.rijksoverheid.nl/onderwerpen/duurzame-energie/meer-duurzame-energie-in-de-toekomst
[4] http://www.telegraaf.nl/binnenland/23158817/___Duurzame_energie_onhaalbaar___.html
[5] http://www.cbs.nl/nl-NL/menu/themas/industrie-energie/publicaties/artikelen/archief/2013/2013-3827-wm.htm