Shell to build Dutch Borssele III & IV offshore wind farms

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Shell to build Dutch Borssele III & IV offshore wind farms

A consortium of Royal Dutch Shell, Eneco, Diamond Generating Europe, a 100% subsidiary of Mitsubishi Corp, and Van Oord have won a tender for the construction and operation of Dutch offshore windfarms Borssele III & IV

Wind farms Borssele III & IV are expected to generate more than 3.200 GWh per annum, the equivalent of the electricity used by approximately 825,000 households.

The second Borssele offshore wind farm in the Dutch North Sea is expected to be constructed and operated with a subsidy of just €300 million (US$313 million). The originally anticipated subsidy was 5 billion (US$5.21 billion). 

With this wind farm in the Borssele Wind Farm Zone, the subsidy savings are even higher than for the first 700 MW wind farm (the Borssele I & II sites), which at the time was set to be the world's cheapest offshore wind farm. Moreover, with the current energy price outlook, the second wind farm in Borssele can be operated without subsidy after 7.5 years.

In total, 26 bids from seven parties/consortia were received in the tender to secure  permits and an associated SDE+ subsidy for the two projects at Borssele Wind Farm Site III and IV. The maximum subsidy available for this tender was capped at €11.975 cents per kilowatthour. This amount excludes costs for connecting the wind farm to the electricity grid (which is the responsibility of state TSO TenneT).

The winning consortium bid €54.5/MWh (US$56.85/MWh). By comparison, DONG Energy Borssele 1 BV won the previous tender with a price of €72.7/MWh.

Announcing the tender result, Minister Kamp of Economic Affairs said:

“If the electricity price develops as we expect, in 7.5 years’ time subsidies will no longer be required  for the production of electricity from offshore wind farms. That brings the Government's aim for renewables to compete with fossil fuels without subsidy within reach. The Netherlands is a front runner in the development of offshore wind energy, creating many opportunities for the Dutch industry. With these winners this becomes even more clearly visible.”

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