The Netherlands will replace its subsidy program for large-scale renewable projects with a two-way CfD scheme starting in 2027, according to the Ministry of Climate Policy and Green Growth. The proposed shift aims to align national policy with EU electricity market reforms.

The existing SDE++ program provides multi-year operating subsidies for large-scale solar, wind, and hydropower projects. According to the ministry, the European Commission considers the current subsidy structure overly generous and believes it distorts the market.

Under the new framework, projects larger than 200 kW will receive a fixed price for electricity generation through a two-way CfD. When market prices fall below the strike price, the government will compensate developers for the difference; when prices exceed it, developers will return the surplus.

The ministry said existing SDE++ subsidies will remain unchanged. A public consultation on the CfD proposal is open until Nov. 14.

Several European nations, including Romania and the United Kingdom, already use two-way CfDs for large-scale renewables.

In June, the Ministry of Economic Affairs announced results of the 2024 SDE++ round, awarding 1.79 GW of solar capacity – 1,237 MW of ground-mounted projects, 448 MW of industrial rooftop systems, and 107 MW of floating installations. Applications for the 2026 round remain open until Nov. 6, with an €8 billion ($9.3 billion) budget.

In September, the Ministry of Climate and Green Growth and the Ministry of Housing and Spatial Planning proposed amendments to the Dutch Environmental Decree to accelerate permitting for transmission and distribution projects above 21 kV.