The Netherlands looks forward to second offshore wind farm without subsidy

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Offshore wind energy in the Netherlands

The construction and operation of a second offshore wind farm without subsidy in the Netherlands has attracted interest. The tender period for offshore wind energy permit applications for Sites III and IV in the Hollandse Kust (zuid) Wind Farm Zone (HKZWFZ) is now closed. In terms of applicants, the tender drew a similar number to the first successful subsidy-free tender for Sites I and II of the HKZWFZ. The offshore wind farm [HKZWFZ III and IV) will generate sufficient sustainable energy to meet approximately 2.5% of total electricity consumption in the Netherlands each year.

The cost of offshore wind energy has fallen spectacularly in recent years, in part thanks to the Dutch approach. This approach previously resulted in permission being granted for the world’s first subsidy-free offshore wind farm at HKZWFS I and II. Vattenfall was awarded the permit in 2018 and has now commenced preparations for the construction work. This wind farm is situated next to the wind farm for which the current tender was open. Meanwhile, Ørsted and the Blauwwind consortium will soon be starting construction work for the offshore wind farms in the Borssele Wind Farm Zone.

Over the next few months, the submitted applications will be assessed on their technical and financial feasibility by the Netherlands Enterprise Agency (RVO.nl) and independent external experts. In the event of there being multiple feasible applications, a winner will be selected by ranking the applicants on six criteria. One important criterion in this regard is how fluctuations in market price for electricity are taken into account.

The winner of the tender will be granted a permit for a 30-year period, covering construction, operation and decommissioning of the wind farm. In addition, the winner will be required to pay 50 million euros in charges relating to the right of superficies (seabed lease for the parts of the wind farm in the Dutch territorial sea). The construction of the export cable to land, which will be done by transmission system operator TenneT, is to be funded by the Dutch government. The wind farm will have a capacity of not less than 700 MW, enabling it to produce enough energy for 2.5% of the total annual electricity consumption in the Netherlands.