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The Netherlands will build the world’s first subsidy-free offshore wind farm

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The Dutch Government has awarded Vattenfall a tender to build the twin Hollandse Kust Zuid offshore wind farms, the world’s first to be built without public subsidy.
The Netherlands will build the world’s first subsidy-free offshore wind farm
Courtesy National Renewable Energy Laboratory

The two 350 MW wind farms are to be completed by 2022. The news follows the zero-subsidy offshore wind tender in Germany last year that was a landmark for the industry in that it was the first to attract zero subsidy bids. However, these German projects will be built in 2024-25, after Hollandse Kust Zuid is commissioned.

Following the German tender, the Dutch Government accepted offers from any developer prepared to submit a zero-subsidy bid. These were then assessed according to a range of qualitative criteria. The Dutch Government takes on some of the risks involved in offshore wind projects, such as the cost of the grid connection.

Constructing wind farms without public subsidy means that the facilities can sell their electricity on the wholesale power market instead of relying on a revenue stabilisation scheme, such as the UK’s ‘Contract for Difference’, which locks in fixed revenue.

“This news shows zero-subsidy bids are possible for some developers in some markets not least where Governments take on and manage a share of the project risk” said WindEurope CEO Giles Dickson. “In this instance the Dutch Government taking care of the grid connection is a significant factor. Plus the Dutch Government has successfully minimised the risk linked to offshore wind by giving clear visibility about future market volumes."

For additional information:

Vattenfall

WindEurope

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