Netherlands to Offer Smaller Wind Farms to Reduce Developer’s Risks

Netherlands offshore wind — The Netherlands was among the early adopters and reached nearly 5 GW as of 2023 from offshore wind (file photo)

The Dutch government for its next offshore wind auction is presenting a novel approach to helping reduce the financial risk and challenges facing wind farm developers. While the accepted approach has been to increase the size of the wind farms to achieve economies of scale and efficiency, the Netherlands Enterprise Agency (RVO) reports they will split the planned sites into smaller projects to reduce the capital requirements and risks.

“RVO received multiple bids from wind farm developers,” they noted referencing the June 2024 auctions while saying it was also “less than expected. This was partly due to the changed market situation,” RVO asserts. They mentioned cost increases and the lower certainty for returns as being deterrents for potential participants in the auctions.

The Netherlands in June auctioned two leases each for sites able to provide 2 GW. One group was led by SSE with two investment firms and the other was a combination of Vattenfall and Copenhagen Infrastructure Partners.

Plans for two new wind farms will be split to four plots for tender in 2025 (RVO)

The plan called for auctioning two additional areas in 2025 located in the North Sea northwest of the Netherlands. The new approach splits Ijmuiden Ver Gamma into an A plot approximately 33 miles from shore and a B plot approximately 38 miles from shore. Each will have a capacity for 1 GW meaning the Netherlands will still receive its goal of 2 GW from the total project.

Similarly, Nederwiek is also being split into a northern and southern site. Again, each is for 1 GW or a total of 2 GW for the project. The Netherlands’ goal was for 4 GW in the next round but the Ministry of Climate and Green Growth looks to attract more bids with a smaller investment and reduced financial risk for the developers. There is no mention in the materials if they will permit one developer to bid on the adjoining parcels to recreate the planned larger wind farm.

They note the new approach can still use the planned infrastructure for the sites. TenneT is installing the offshore grid to connect the wind farms to the high-voltage grid on land. TenneT will provide two high voltage direct current platforms each capable of handling 2 GW. These platforms will each be established to handle two of the sites.

The RVO expects to announce the details of the permit tender in the fourth quarter of 2024. They expect to conclude the round for permit applications by the third quarter of 2025.