Dutch offshore plans offer investors options

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Richard Heap
March 4, 2016
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This content is from our archive. Some formatting or links may be broken.
Dutch offshore plans offer investors options

The Netherlands started to build offshore wind farms in the Dutch North Sea at about the same time as the UK and Germany started big schemes in their waters, but it has failed to keep pace.

We need only look at the European Wind Energy Association’s offshore wind statistics published last month for the evidence.

There were only six operational wind farms in Dutch waters at the end of 2015, totalling 427MW. This is way behind the UK’s 27 projects totalling over 5GW and Germany’s 18 totalling 3.3GW. It also trails Denmark (1.3GW) and Belgium (712MW).

But growth is on the way for Dutch offshore, and this must be good for investors, developers and manufacturers alike. The offshore market is currently too reliant on the two big-hitters, the UK and Germany, and diversification will provide more strength and depth.

The most high-profile of these projects is the 600MW Gemini, which sent its first power to the grid last week and is due to complete in 2017. The project secured its €2.8bn funding in 2014. And then there was also the 129MW Luchterduinen that completed last year; and the 144MW Westermeerwind, which is scheduled to complete by the middle of this year.

These are three key schemes and the nation is planning for more.

One big test for the future of the Dutch offshore sector will come in the nation's Senate. It is set to vote this month on a new electricity law that would allow the government to tender for developers for a further 1.4GW this year, as part of a plan to hold offshore tenders for 3.5GW by the end of 2019. It wants all of this built by 2023.

This electricity law has had a difficult gestation. The government had been planning to hold five offshore wind tenders for 700MW each over the five years to 2019, but in December the Senate failed to approve the law that would have enabled it to do so.

Now the Senate has to vote on an amended bill that would, among other things, enable the country to hold two tenders this year.

If this is passed then the government is poised to start the tender for the 350MW Borssele 1 and 350MW Borssele 2 in May and complete it in late summer. It then plans to start a tender for 700MW in another part of the Borssele area off the coast of Zeeland in October; and three other 700MW tenders annually between 2017 and 2019.

The re-emergence of the Netherlands should give investors confidence that there will still be opportunities to back new onshore wind farms away from the largest markets; and also hearten the likes of MHI Vestas and Siemens that there will be customers for their 8MW and 7MW machines. The offshore wind sector has made great strides in reducing the cost and improving the quality of schemes, but it is still highly reliant on a couple of big markets.

There is uncertainty in the UK because the government is only offering support to offshore wind until 2020 as long as the industry meets vague cost-reduction targets. Commitments by Dong Energy and Scottish Power last month to build the 1.2GW Hornsea 1 and 714MW East Anglia 1 respectively are good, but the UK is still reliant on capricious politicians.

Meanwhile, in Germany, the 2.3GW completed in German waters in 2015 was bolstered by delays to projects that were due to complete in the previous year; and the government is looking at ways to cut support for renewables. It is already planning to cut minimum targets for new onshore wind farms to built each year, and offshore could well face a similar fate.

If either or both of these markets falter then a newly-reinvigorated Dutch market would be a godsend for offshore wind investors.

The Netherlands started to build offshore wind farms in the Dutch North Sea at about the same time as the UK and Germany started big schemes in their waters, but it has failed to keep pace.

We need only look at the European Wind Energy Association’s offshore wind statistics published last month for the evidence.

There were only six operational wind farms in Dutch waters at the end of 2015, totalling 427MW. This is way behind the UK’s 27 projects totalling over 5GW and Germany’s 18 totalling 3.3GW. It also trails Denmark (1.3GW) and Belgium (712MW).

But growth is on the way for Dutch offshore, and this must be good for investors, developers and manufacturers alike. The offshore market is currently too reliant on the two big-hitters, the UK and Germany, and diversification will provide more strength and depth.

The most high-profile of these projects is the 600MW Gemini, which sent its first power to the grid last week and is due to complete in 2017. The project secured its €2.8bn funding in 2014. And then there was also the 129MW Luchterduinen that completed last year; and the 144MW Westermeerwind, which is scheduled to complete by the middle of this year.

These are three key schemes and the nation is planning for more.

One big test for the future of the Dutch offshore sector will come in the nation's Senate. It is set to vote this month on a new electricity law that would allow the government to tender for developers for a further 1.4GW this year, as part of a plan to hold offshore tenders for 3.5GW by the end of 2019. It wants all of this built by 2023.

This electricity law has had a difficult gestation. The government had been planning to hold five offshore wind tenders for 700MW each over the five years to 2019, but in December the Senate failed to approve the law that would have enabled it to do so.

Now the Senate has to vote on an amended bill that would, among other things, enable the country to hold two tenders this year.

If this is passed then the government is poised to start the tender for the 350MW Borssele 1 and 350MW Borssele 2 in May and complete it in late summer. It then plans to start a tender for 700MW in another part of the Borssele area off the coast of Zeeland in October; and three other 700MW tenders annually between 2017 and 2019.

The re-emergence of the Netherlands should give investors confidence that there will still be opportunities to back new onshore wind farms away from the largest markets; and also hearten the likes of MHI Vestas and Siemens that there will be customers for their 8MW and 7MW machines. The offshore wind sector has made great strides in reducing the cost and improving the quality of schemes, but it is still highly reliant on a couple of big markets.

There is uncertainty in the UK because the government is only offering support to offshore wind until 2020 as long as the industry meets vague cost-reduction targets. Commitments by Dong Energy and Scottish Power last month to build the 1.2GW Hornsea 1 and 714MW East Anglia 1 respectively are good, but the UK is still reliant on capricious politicians.

Meanwhile, in Germany, the 2.3GW completed in German waters in 2015 was bolstered by delays to projects that were due to complete in the previous year; and the government is looking at ways to cut support for renewables. It is already planning to cut minimum targets for new onshore wind farms to built each year, and offshore could well face a similar fate.

If either or both of these markets falter then a newly-reinvigorated Dutch market would be a godsend for offshore wind investors.

The Netherlands started to build offshore wind farms in the Dutch North Sea at about the same time as the UK and Germany started big schemes in their waters, but it has failed to keep pace.

We need only look at the European Wind Energy Association’s offshore wind statistics published last month for the evidence.

There were only six operational wind farms in Dutch waters at the end of 2015, totalling 427MW. This is way behind the UK’s 27 projects totalling over 5GW and Germany’s 18 totalling 3.3GW. It also trails Denmark (1.3GW) and Belgium (712MW).

But growth is on the way for Dutch offshore, and this must be good for investors, developers and manufacturers alike. The offshore market is currently too reliant on the two big-hitters, the UK and Germany, and diversification will provide more strength and depth.

The most high-profile of these projects is the 600MW Gemini, which sent its first power to the grid last week and is due to complete in 2017. The project secured its €2.8bn funding in 2014. And then there was also the 129MW Luchterduinen that completed last year; and the 144MW Westermeerwind, which is scheduled to complete by the middle of this year.

These are three key schemes and the nation is planning for more.

One big test for the future of the Dutch offshore sector will come in the nation's Senate. It is set to vote this month on a new electricity law that would allow the government to tender for developers for a further 1.4GW this year, as part of a plan to hold offshore tenders for 3.5GW by the end of 2019. It wants all of this built by 2023.

This electricity law has had a difficult gestation. The government had been planning to hold five offshore wind tenders for 700MW each over the five years to 2019, but in December the Senate failed to approve the law that would have enabled it to do so.

Now the Senate has to vote on an amended bill that would, among other things, enable the country to hold two tenders this year.

If this is passed then the government is poised to start the tender for the 350MW Borssele 1 and 350MW Borssele 2 in May and complete it in late summer. It then plans to start a tender for 700MW in another part of the Borssele area off the coast of Zeeland in October; and three other 700MW tenders annually between 2017 and 2019.

The re-emergence of the Netherlands should give investors confidence that there will still be opportunities to back new onshore wind farms away from the largest markets; and also hearten the likes of MHI Vestas and Siemens that there will be customers for their 8MW and 7MW machines. The offshore wind sector has made great strides in reducing the cost and improving the quality of schemes, but it is still highly reliant on a couple of big markets.

There is uncertainty in the UK because the government is only offering support to offshore wind until 2020 as long as the industry meets vague cost-reduction targets. Commitments by Dong Energy and Scottish Power last month to build the 1.2GW Hornsea 1 and 714MW East Anglia 1 respectively are good, but the UK is still reliant on capricious politicians.

Meanwhile, in Germany, the 2.3GW completed in German waters in 2015 was bolstered by delays to projects that were due to complete in the previous year; and the government is looking at ways to cut support for renewables. It is already planning to cut minimum targets for new onshore wind farms to built each year, and offshore could well face a similar fate.

If either or both of these markets falter then a newly-reinvigorated Dutch market would be a godsend for offshore wind investors.

The Netherlands started to build offshore wind farms in the Dutch North Sea at about the same time as the UK and Germany started big schemes in their waters, but it has failed to keep pace.

We need only look at the European Wind Energy Association’s offshore wind statistics published last month for the evidence.

There were only six operational wind farms in Dutch waters at the end of 2015, totalling 427MW. This is way behind the UK’s 27 projects totalling over 5GW and Germany’s 18 totalling 3.3GW. It also trails Denmark (1.3GW) and Belgium (712MW).

But growth is on the way for Dutch offshore, and this must be good for investors, developers and manufacturers alike. The offshore market is currently too reliant on the two big-hitters, the UK and Germany, and diversification will provide more strength and depth.

The most high-profile of these projects is the 600MW Gemini, which sent its first power to the grid last week and is due to complete in 2017. The project secured its €2.8bn funding in 2014. And then there was also the 129MW Luchterduinen that completed last year; and the 144MW Westermeerwind, which is scheduled to complete by the middle of this year.

These are three key schemes and the nation is planning for more.

One big test for the future of the Dutch offshore sector will come in the nation's Senate. It is set to vote this month on a new electricity law that would allow the government to tender for developers for a further 1.4GW this year, as part of a plan to hold offshore tenders for 3.5GW by the end of 2019. It wants all of this built by 2023.

This electricity law has had a difficult gestation. The government had been planning to hold five offshore wind tenders for 700MW each over the five years to 2019, but in December the Senate failed to approve the law that would have enabled it to do so.

Now the Senate has to vote on an amended bill that would, among other things, enable the country to hold two tenders this year.

If this is passed then the government is poised to start the tender for the 350MW Borssele 1 and 350MW Borssele 2 in May and complete it in late summer. It then plans to start a tender for 700MW in another part of the Borssele area off the coast of Zeeland in October; and three other 700MW tenders annually between 2017 and 2019.

The re-emergence of the Netherlands should give investors confidence that there will still be opportunities to back new onshore wind farms away from the largest markets; and also hearten the likes of MHI Vestas and Siemens that there will be customers for their 8MW and 7MW machines. The offshore wind sector has made great strides in reducing the cost and improving the quality of schemes, but it is still highly reliant on a couple of big markets.

There is uncertainty in the UK because the government is only offering support to offshore wind until 2020 as long as the industry meets vague cost-reduction targets. Commitments by Dong Energy and Scottish Power last month to build the 1.2GW Hornsea 1 and 714MW East Anglia 1 respectively are good, but the UK is still reliant on capricious politicians.

Meanwhile, in Germany, the 2.3GW completed in German waters in 2015 was bolstered by delays to projects that were due to complete in the previous year; and the government is looking at ways to cut support for renewables. It is already planning to cut minimum targets for new onshore wind farms to built each year, and offshore could well face a similar fate.

If either or both of these markets falter then a newly-reinvigorated Dutch market would be a godsend for offshore wind investors.

The Netherlands started to build offshore wind farms in the Dutch North Sea at about the same time as the UK and Germany started big schemes in their waters, but it has failed to keep pace.

We need only look at the European Wind Energy Association’s offshore wind statistics published last month for the evidence.

There were only six operational wind farms in Dutch waters at the end of 2015, totalling 427MW. This is way behind the UK’s 27 projects totalling over 5GW and Germany’s 18 totalling 3.3GW. It also trails Denmark (1.3GW) and Belgium (712MW).

But growth is on the way for Dutch offshore, and this must be good for investors, developers and manufacturers alike. The offshore market is currently too reliant on the two big-hitters, the UK and Germany, and diversification will provide more strength and depth.

The most high-profile of these projects is the 600MW Gemini, which sent its first power to the grid last week and is due to complete in 2017. The project secured its €2.8bn funding in 2014. And then there was also the 129MW Luchterduinen that completed last year; and the 144MW Westermeerwind, which is scheduled to complete by the middle of this year.

These are three key schemes and the nation is planning for more.

One big test for the future of the Dutch offshore sector will come in the nation's Senate. It is set to vote this month on a new electricity law that would allow the government to tender for developers for a further 1.4GW this year, as part of a plan to hold offshore tenders for 3.5GW by the end of 2019. It wants all of this built by 2023.

This electricity law has had a difficult gestation. The government had been planning to hold five offshore wind tenders for 700MW each over the five years to 2019, but in December the Senate failed to approve the law that would have enabled it to do so.

Now the Senate has to vote on an amended bill that would, among other things, enable the country to hold two tenders this year.

If this is passed then the government is poised to start the tender for the 350MW Borssele 1 and 350MW Borssele 2 in May and complete it in late summer. It then plans to start a tender for 700MW in another part of the Borssele area off the coast of Zeeland in October; and three other 700MW tenders annually between 2017 and 2019.

The re-emergence of the Netherlands should give investors confidence that there will still be opportunities to back new onshore wind farms away from the largest markets; and also hearten the likes of MHI Vestas and Siemens that there will be customers for their 8MW and 7MW machines. The offshore wind sector has made great strides in reducing the cost and improving the quality of schemes, but it is still highly reliant on a couple of big markets.

There is uncertainty in the UK because the government is only offering support to offshore wind until 2020 as long as the industry meets vague cost-reduction targets. Commitments by Dong Energy and Scottish Power last month to build the 1.2GW Hornsea 1 and 714MW East Anglia 1 respectively are good, but the UK is still reliant on capricious politicians.

Meanwhile, in Germany, the 2.3GW completed in German waters in 2015 was bolstered by delays to projects that were due to complete in the previous year; and the government is looking at ways to cut support for renewables. It is already planning to cut minimum targets for new onshore wind farms to built each year, and offshore could well face a similar fate.

If either or both of these markets falter then a newly-reinvigorated Dutch market would be a godsend for offshore wind investors.

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Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.