Dutch auction highlights offshore wind’s cost credentials

The Netherlands Enterprise Agency announced on 10 July 2019 that Vattenfall had won the tender to build and operate the Hollandse Kust (Zuid) 3 and 4 offshore windfarms in the Dutch sector of the North Sea North Sea. Hollandse Kust (Zuid) 3 and 4 have a combined capacity of 760 MW and will start operating in 2023. They are the latest in a series of annual offshore wind auctions in the Netherlands.

Responding to the announcement, WindEurope chief executive Giles Dickson said, “This auction shows yet again that offshore wind is now very competitive – and is consistent with Bloomberg data that shows offshore wind is now the cheapest form of new power in northwestern Europe apart from onshore wind.

“The zero-subsidy system seems to work in the Netherlands, because the Dutch share a lot of the project risk, and it’s not hard for windfarms to find corporate buyers for the power they produce. But in most European countries offshore wind auctions need to offer stable revenues – and this reduces the financing and therefore the total societal costs.

“The Dutch are doing well on offshore wind. They have a good steady auction plan of around 700 MW every year. They provide clear visibility of what they’re auctioning and when, which helps reduce costs. They’re taking a strategic approach to grid investments – and a healthy long-term view of marine spatial planning aiming at happy co-existence between offshore wind, fishing and biodiversity.

“Their recent Climate Agreement sets a target of 11.5 GW offshore wind by 2030. They could actually do more than this and should do once they factor in increased electrification in industry.”