Dutch Minister for Climate and Green Growth Sophie Hermans has set the stage for a significant shift in the country’s renewable energy support framework. In a letter to the Dutch parliament, Hermans outlined plans to introduce a two-way Contracts for Difference (CfDs) support scheme for onshore renewables, replacing the existing SDE++ subsidy program. This move is driven by new EU regulations on electricity market design, aiming to reshape how renewable energy projects are supported and integrated into the market.
The new CfD scheme is designed to provide price certainty for developers, encouraging efficient electricity generation and reducing grid congestion. “The CfDs will contribute to developing a market in which renewables can be developed without government support,” Hermans stated, highlighting the long-term goal of fostering a self-sustaining renewable energy sector.
The legislative proposal for this policy shift is expected to be published this summer, with the process culminating in the submission of legislation to the Council of State before the end of 2025. Following this, the proposal will be presented to parliament in early 2026. Under the European Electricity Market Design regulations, operational support for solar PV and onshore wind will be restricted to two-sided CfDs from mid-July 2027.
This transition could have far-reaching implications for the Dutch renewable energy sector. By shifting from operating subsidies to CfDs, the government aims to create a more market-oriented approach, potentially attracting more private investment and fostering competition. The focus on reducing grid congestion also addresses a critical challenge in integrating renewable energy sources into the existing infrastructure.
Moreover, the move aligns with broader EU efforts to create a more resilient and flexible electricity market. As other member states implement similar changes, the Dutch experience could serve as a valuable case study, influencing the development of renewable energy support mechanisms across Europe.
However, the transition also presents challenges. Developers and investors will need to adapt to the new framework, and the success of the scheme will depend on its design and implementation. Ensuring that the CfDs effectively balance risk and reward for developers while promoting market efficiency will be key.
In the broader context, this shift could accelerate the development of a more competitive and innovative renewable energy sector in the Netherlands. By providing a clear signal of long-term support and encouraging market-driven solutions, the CfDs could help the country meet its climate and energy goals more effectively. As the legislative process unfolds, stakeholders will be watching closely to see how the details of the scheme take shape and what impact it will have on the renewable energy landscape.