Industry Shows Interest in Dutch Zero-Subsidy Offshore Wind (Interview)

The Dutch government did not just single-handedly decide to go forward with zero-subsidy tenders, serious developers tell and show it is possible, and as long as this is the case the government will not provide unnecessary subsidies or other forms of market protection, Ruud de Bruijne from the Netherlands Enterprise Agency (RVO.nl) said in an interview with Offshore WIND.

During our interview at the Offshore Energy Exhibition & Conference (OEEC) in Amsterdam, RVO’s Project Manager for Offshore Wind stated that the Netherlands is well-positioned in terms of non-subsidized tenders since it has been de-risking offshore wind farms and providing the whole consenting process.

“Even though the industry is now asking for some kind of market protection, we already have taken away a number of their risks, so we provide them with a full set of site data. TenneT does the grid connection, it’s the government who has put in place a compensation scheme in case the grid connection doesn’t work, so a lot of de-risking has already been done, not to mention the whole consenting. If you win a tender, you just get permits and that’s it,” De Bruijne said.

Nonetheless, De Bruijne claims it is not only the Dutch system that enabled lower costs. The Netherlands also has very good wind resources, relatively low water depths, seabed allowing for easy foundation installation, good port and electrical infrastructure, as well as no hurricanes, earthquakes and tsunamis, in addition to the general industry development.

You have to realize that it’s not just the Dutch system which has led to these low LCoE costs, there are other factors as well. The industry and the supply chain have become very mature, the wind turbines became bigger and there are also a number of physical local conditions which differ, the circumstances are very ideal in this part of the world.”

Talking about all the factors that brought the Netherlands to have the world’s first non-subsidized wind farm tender, De Bruijne pointed out that the technical risks are currently very limited, however, the most important risk which remains is the merchant risk, but this is also part of “growing mature.”

“It is for sure that if renewables are becoming the most important source of power generation, I can’t see any other way to do it than without subsidies. If in the future the situation changes, the goals are most important, then the government can re-introduce subsidy in the tenders,” De Bruijne stated.

Interest There for Non-Subsidized Hollandse Kust South III & IV

Earlier in October, the Netherlands Enterprise Agency announced that the tender for the Hollandse Kust South sites III & IV will be published in Q4 2018 and will close in Q1 2019.

De Bruijne confirmed that this tender will be similar to the one for sites I & II, meaning that the opening round will be zero-subsidy, but in case no applications are received, a tender round including subsidies can follow.

“The Hollandse Kust South III & IV is quite similar to the previous one according to the water depth, the wind resource, etc. What I have seen so far, there is interest to do this without subsidies, I am not worried about that, but in the unexpected situation that we will not get applications, the government can start a tender with subsidies,” according to De Bruijne.

Following the completion of the first subsidy-free tender, an amendment of the Offshore Wind Energy Act was announced, which will see the introduction of the possibility to rank applications by an auction, among other changes.

The amendment is dependent on the approval by the Parliament and it is still unknown when it will come into force, however, De Bruijne believes it will be ready by the time the Hollandse Kust North tender is launched in 2019.

“We are preparing for an auction, which doesn’t mean that there has already been a decision what ranking mechanism we will use, but we are preparing to be ready in time,” De Bruijne said.

2030 Offshore Wind Roadmap

The Dutch government is currently busy with defining the exact wind farm sites in the wind farm zones designated as Hollandse Kust West, Ten noorden van de Waddeneilanden and IJmuiden Ver, which will together add 7GW of offshore wind capacity between 2024 and 2030.

Fugro is currently doing the first geophysical survey in the Hollandse Kust West zone, while the government is preparing site investigations at Ten noorden van de Waddeneilanden, De Bruijne said.

For the 4GW IJmuiden Ver, the decision on how it is going to be connected to the onshore high-voltage grid is soon to be made.

There will be DC connections, but the big question is whether the energy will be transported through a number of DC platforms or an artificial island. This decision needs to be taken shortly because the consenting procedures have to start.”

Every half a year, RVO.nl organizes a workshop where the offshore wind industry has an opportunity to find out more on the project updates, and the latest one was held at OEEC in Amsterdam.

This year’s conference came in just at the right time, according to De Bruijne: “Our workshops are usually attended by something between 100 and 150 people from all over the world. During this event, it is a little busier, but it’s also convenient for our regular visitors because a lot of them are already here, so that makes sense to combine it.”

Written by Nadja Skopljak, Editing by Adrijana Buljan and Adnan Duraković; Offshore WIND Staff