Advantages of scale see Vattenfall secure the Netherland's second zero-subsidy tender

An announcement confirming the company’s winning bid was made today (10 July 2019) by the Dutch Ministry of Economic Affairs and Climate Policy.

In 2018, the company also won the contract to build the Hollandse Kust (Zuid) 1 and 2 offshore windfarms.

On completion in 2023, the windfarms will generate 760 MW of electricity.

Vattenfall will pay around €2.0M (US$2.2M) per year in ‘ground rent’ for the seabed area where Hollandse Kust (Zuid) 3 and 4 will be built.

The cable connecting the windfarms to the mainland will be installed by transmission system operator TenneT.

The Netherlands Ministry of Economic Affairs and Climate Policy published a ministerial order for the tender in the Government Gazette on 3 December 2018. The tender opened on 1 March 2019.

The tender criteria for Hollandse Kust (Zuid) 3 and 4 were very similar to that for Hollandse Kust (Zuid) 1 and 2 with submissions assessed on the basis of risk identification and mitigation, including the merchant risk involved and the expected yield.

In the run-up to the announcement, Vattenfall senior vice president and head of business area wind Gunnar Groebler said he believed the company’s bid could benefit from scale advantages that would be realised if the two projects could be combined. He said that scale would also bring significant benefits in terms of cost reduction.

Vattenfall chief executive Magnus Hall said, "This is excellent news for Vattenfall, our partners and the Dutch energy transition. It means a significant step for Vattenfall in view of our ambition to make fossil-free living possible within one generation and to grow in renewable energy production. The Netherlands is an important market for us and this will be one of our biggest offshore projects.”

Mr Groebler said, "Winning the tender for Hollandse Kust (Zuid) 3 and 4 is a result of continuous efforts along our entire value chain and the solid track record and portfolio approach of our company. We can now bundle the Hollandse Kust (Zuid) 1 and 2 and 3 and 4 projects together, which is a great advantage, leading to further optimisation and synergies."

Offshore construction is scheduled to take place in 2022. According to the tender rules, Hollandse Kust (Zuid) 3 and 4 need to be fully operational within five years of the permit for the projects becoming irrevocable.