IPPToday #132: First zero-subsidy offshore wind tender held in the Netherlands
- Ørsted (former DONG Energy)
- Eneco Group
- Diamond Generating Corporation
- Shell Global
- Van Oord
This article is part of a daily series of IPP articles. If you want to know more about the latest power generation projects globally visit our IPP Today section. You can receive them by email on a daily basis.
The Dutch Ministry of Economic Affairs and Climate Policy has held the country's first zero-subsidy offshore wind tender. The tender, described as a huge breakthrough by the Minister of Economic Affairs and Climate Policy, concerned sites I and II of the Hollandse Kust (Zuid) off-shore wind farm. It closed on 21 December 2017.
The wind farm will have capacity of 700 MW and be operational by 2022. One permit will be granted for each wind farm site, with applications allowed to be made for a permit for each of the two wind farm sites. The permits awarded will be 30 years in length.
The Netherlands Enterprise Agency are legally obliged to assess all submissions within 13 weeks. Thus, a winner should be announced by March.
The Hollandse Kust (Zuid) wind farm zone lies to the west of the Netherlands, offshore from the province of Zuid-Holland (South Holland). The wind farm zone has four sites, each of which will generate 350 MW. TSO TenneT will build grid connections and construct two offshore substations in the wind farm zone.
The Ministry specifically cited the results of the subsidy tenders for the Borssele wind farm zone as a key factor in the decision to tender the project without subsidies. These resulted in record low prices for offshore wind development, illustrating the substantial reduction in costs in recent years, and thus indicating that a zero-subsidy tender was possible.
The future of off-shore wind in Netherlands is bright, given the numerous projects currently in development. In 2016, Ørsted (previously DONG Energy) won the permit for Borssele wind farm sites I and II (700 MW), while sites III and IV (680 MW) were won by a consortium consisting of Eneco, Diamond Generation Europe, Shell and Van Oord. The subsidy and permit tender for zones III and IV of Hollandse Kust (Zuid) is scheduled for 2018. Furthermore, an additional 700MW is planned to be tendered in 2019 in the Hollandse Kust (Noord) zone.
The most recent development in this packed pipeline is the launch of Borssele site V tender. This concerns a 20 MW section of the Borssele wind farm zone that has been designated an innovation site. The Dutch government intends for site to provide Dutch entrepreneurs with the opportunity to test and demonstrate advanced technologies, contributing to reducing the cost of wind energy and increasing the market and export potential for Dutch companies.
The tender closes on 18 January 2018.
The Netherlands is currently working towards achieving a 14% share for renewable energy in 2020 and a 16% share in 2023. These targets were set out in the Energy Agreement for Sustainable Growth (Energieakkoord voor duurzame groei), signed in September 2013, by civic, industrial and environmental bodies. Offshore wind will form a major component of the total renewable share, with the country aiming to produce 4.5 GW from offshore wind farms by 2024.