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German tenders prompt Dutch to seek subsidy-free bids

Wed 02 Aug 2017

German tenders prompt Dutch to seek subsidy-free bids
To-date, Dutch offshore windfarms have all been subsidised but cost reduction means that zero-subsidy bids might now be possible

In the light of recent zero-subsidy bids in Germany, the Dutch Government has opted for a pragmatic solution for its next round of tenders for offshore windfarms

 

The Netherlands minister of economic affairs Henk Kamp says he is seeking subsidy-free bids for both zones in the upcoming tender process for the Hollandse Kust offshore windfarm.

In a letter to the House of Representatives on 28 June 2017, the minister said companies prepared to make zero-subsidy bids would be given the opportunity to bid for the projects first.

“In this tender, market parties may submit a bid for the realisation of the windfarm without subsidies. In the event that this tender procedure fails to yield an acceptable bid, a tender procedure that includes subsidies will be started,” said the minister.

In the tender without subsidies, bids will be evaluated based on criteria established in the Offshore Wind Energy Act. These include the knowledge and experience of the parties involved, quality of the design of the windfarm, the capacity of the windfarm, social costs, the quality of the identification and analysis of the risks involved, and the quality of the measures initiated to safeguard cost-effectiveness.

The Ministry of Economic Affairs said it plans to elaborate on the above criteria in a new Ministerial Order for Offshore Wind Energy.

“For this tender, the deciding factor will no longer be the lowest price, but rather the quality of the bidding party, the quality of the design and the quantity of electricity that will be produced,” it said.

In the event that the subsidy-free procedure fails to provide an acceptable bid, a tender that includes subsidies will be opened, and bids will be ranked based on the bid price.

The decision to seek subsidy-free bids follows three tenders for offshore windfarms in Germany that resulted in a subsidy-free award: the He Dreiht windfarm (EnBW), the OWP West windfarm (Dong Energy) and the Borkum Riffgrund WII windfarm (Dong Energy).

Martin In De Breakt, a partner at law firm Stibbe in Amsterdam, said the minister acknowledges that there are differences between the recent German and Dutch tenders, including (among other things) the regulatory framework, the expected date of operation and the wind speed. However, despite these differences, Mr Kamp did not want to exclude the possibility that a non-subsidised bid would be submitted in the tender for Hollandse Kust I and II.

The Offshore Wind Energy Act in the Netherlands already provides for a procedure for tenders including subsidies and one for non-subsidised tenders. In a tender procedure including subsidies, the applicant with the lowest subsidy price wins the tender.

The Hollandse Kust (Zuid) Wind Farm Zone (HKZWFZ) lies to the west of the Netherlands, offshore the province of Zuid-Holland (South Holland). This windfarm zone has four sites. The tender round for HKZWFZ will offer two 350 megawatt projects for development: one at site I and the other at site II. The opening of the tender is expected this autumn.

Port of Rotterdam plans offshore wind terminal

The Port of Rotterdam in the Netherlands is planning to create a terminal serving the fast-growing offshore wind energy industry. The port says the facility will also be available for decommissioning offshore oil and gas platforms.

A new 70-hectare facility is being created using land reclamation of the type used to create the Maasvlakte 2 facility in the Prinses Alexiahaven. The port says “definite interest” in the new facility is already being shown by businesses.

Allard Castelein, chief executive of Rotterdam Port Authority, said the Offshore Center Maasvlakte 2 (OCMV2) will be located in the Prinses Alexiahaven. It will be a centre where leading businesses work together in the offshore wind, decommissioning and oil and gas markets with activities such as construction, assembly, heavy lift, logistics, mobilisation and demobilisation.

The port plans to make a start as soon as possible reclaiming the first 30 hectares of land and installing a heavy-lift quay. The plan is that the first businesses will become operational at OCMV2 in 2019.