The Dutch Government has awarded Vattenfall a tender to develop the twin Hollandse Kust Zuid offshore windfarms. The two 350 MW windfarms, to be built by 2022, will be the world’s first to be built without public subsidy.
The news follows the zero-subsidy offshore wind tender in Germany last year that was a landmark for the industry. The German offshore tender was the first to attract zero subsidy winning bids. However, the projects will only be built in 2024-25, after Hollandse Kust Zuid is commissioned.
Following the German tender, the Dutch Government accepted offers from any developer prepared to submit a zero-subsidy bid. Bids were then assessed according to a range of qualitative criteria. The Dutch Government takes on some of the risks involved in offshore wind projects, such as the cost of the grid connection.
WindEurope CEO Giles Dickson said “This news shows zero-subsidy bids are possible for some developers in some markets not least where governments take on and manage a share of the project risk. In this instance the Dutch Government taking care of the grid connection is a significant factor.
"In addition, the Dutch Government has successfully minimised the risk linked to offshore wind by giving clear visibility about future market volumes. It has also committed to bring in a carbon floor price at national level which will help the business case for offshore wind.
“Wind energy is showing again and again that it can deliver ever-more capacity for less cash. That’s the key message other governments should take from this: they should revise their ambition upwards in their national energy plans and offshore wind is a great way to help them do this."
Vattenfall's president and CEO Magnus Hall said "This is excellent news for Vattenfall and the Netherlands. It is a significant step for us in view of our ambitions to grow in renewable energy production. We have previously announced that we intend to invest €1.5Bn in wind power for the period 2017-2018. The Netherlands is an important market for us and this will be our second offshore project there."
Senior vice president business area wind Gunnar Groebler said "Winning the bid for Hollandse Kust Zuid is a result of our continuous cost reduction efforts along our entire value chain and the solid track record and portfolio approach of our company. We are very happy to enlarge our contribution in making the Dutch energy system more sustainable and support our customers, large and small."
According the tender rules, the windfarm needs to be fully operational within five years after an irrevocable permit. Vattenfall will now make the final preparations for the project, including the design of the windfarms, continue internal planning and finalize the tender process for major components.