Now Holland cannot afford to subsidise off-shore wind power

Most subsidies for the introduction of  uneconomic technologies are in an effort to make them commercially viable. But after 30+ years in the power generation industry I have yet to see a case where this has happened. Instead, subsidies have nearly always been counter-productive. In virtually every case I have seen, subsidies have always been used first to maintain margins rather than to reduce costs. If costs are not reduced then the “indirect” costs for every taxpayer which a subsidy represents eventually end up becoming direct costs for the consumer when the subsidies end.

This is happening to an increasing extent with solar and wind power as subsidies are reduced or withdrawn in the current financial crisis. The costs have then to be borne directly by the consumers and it is not surprising that virtually all countries which have introduced wind power to any extent have seen electricity prices to the consumer increase.

Now it is the turn of the Dutch government to reduce subsidies and pass on the costs directly to consumers.

Reuters reports:

Dutch fall out of love with windmills

(Reuters) – When the Netherlands built its first sea-based wind turbines in 2006, they were seen as symbols of a greener future. .. But five years later the green future looks a long way off. Faced with the need to cut its budget deficit, the Dutch government says offshore wind power is too expensive and that it cannot afford to subsidize the entire cost of 18 cents per kilowatt hour — some 4.5 billion euros last year.

The government now plans to transfer the financial burden to households and industrial consumers in order to secure the funds for wind power and try to attract private sector investment. 

It will start billing consumers and companies in January 2013 and simultaneously launch a system under which investors will be able to apply to participate in renewable energy projects.

But the new billing system will reap only a third of what was previously available to the industry in subsidies — the government forecasts 1.5 billion euros every year — while the pricing scale of the investment plan makes it more likely that interested parties will choose less expensive technologies than wind.

The outlook for Dutch wind projects seems bleak.

Related: “Offshore wind power is not affordable” – KPMG

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