The Dutch government is to suspend subsidies for all new offshore wind and large biomass developments to compensate for budget deficits in its renewable energy subsidy budget.

According to the economy ministry, the budget on renewable energy presented a €174 million deficit for 2003 – 2005 following a rise in the renewable contribution to the energy sector from 3.3% in 2003 to 4.5% in 2004. The measures have been introduced to prevent the deficit increasing further despite plans to increase the share of renewable energy to 9% in 2010. The suspension will take effect immediately for all new offshore wind and large biomass plants which are likely to absorb much of the existing budget. The subsidies are expected to be resumed in about 18 months when a new ruling on subsidy ceilings could be delivered.

“The success of the government programme has led to a more rapid increase in subsidised renewable energy production. As a result revenues are no longer covering costs,” the economy ministry said.

As of next year the government also plans raise the annual electricity connection tariff to €100 per customer from €52 currently.