Wind Energy – IJmuiden Ver
Last week the Netherlands announced the winners of the largest wind offshore tenders in Dutch history. OER reported about the award of both permits on June 11 and June 13.
The permits for the construction & operation of the 2 new wind offshore farms with 2 GW were allocated on the basis of a comparative assessment and went to:
- Noordzeker, a consortium of UK developer SSE Renewables and Dutch pension fund APB (via APG), to build an OWF at IJmuiden Ver Alpha. Deciding qualitative criterium was the contribution to biodiversity, e.g. > 75% of the wind turbines in the wind farm will have artificial reefs.
- Zeevonk II, a consortium of Vattenfall and Copenhagen Infrastructure Partners (together with their developer Copenhagen Offshore Partners), to build an OWF at IJmuiden Ver Beta. Deciding qualitative criterium was the contribution to system integration, with a 50 MW offshore solar park and a 1 GW onshore electrolysis (at the port of Rotterdam) being part of the concept.
Matthias Janssen, Associate Director at Frontier Economics, recently posted a very insightful article on social media which I do not want to withhold from you
🔸 Between 2016 and 2018 NL had tendered Contract-for-Difference support for offshore parks, based on a price-only bid (for lowest subsidy needs).
🔸 In 2018 NL switched to a subsidy-free tender for the right to develop and operate an OWF on the tendered site, with award decision based on a ‘comparative assessment” with a high weight on qualitative (‘non-price’) criteria, and a financial bid element with a low bid cap (e.g. of €50 mn for 760 MW in 2022 tenders).
🔸 Now, in the tender for IJmuiden Ver Alpha & Beta the bid cap for the price element was increased substantially (to €400 mn per year over 40y, ie €8 bn in total per GW). Which, inter alia, led Eneco & Equinor to pull out of the tender. Arguing that this would be much more like a price-only tender, such as the one in Germany in 2023 where bp & TotalEnergies won the right to build 7 GW for a payment of €12.6 bn (ie ~ €1.8 bn per GW).
🔸 However, the final price that winning bidders pay is only €1 mn/a for IJmuiden Ver Alpha (ie €20 mn per GW) and €20 mn/a for Beta (ie €400 mn per GW). So substantially short of both the bid cap in NL and the clearing price in Germany‘s price-only tender in 2023.
