Netherlands further invest in offshore wind energy

The Netherlands announced very ambitious plans to expand its offshore wind power this week. Danish offshore specialist DONG Energy has been awarded the contract for the two areas of Borssele 1+2. The areas have the size of of 128.3 km2 and are located 22km off the Dutch coast. Two wind farms, each with a capacity of 350MW, are supposed to provide one million households with electricity. The water depth in the area is between 14-28m which is why it has been already been decided to use monopiles for the turbines. The average wind speed in the area is 9.5 m/s.

The construction is quick to take place: In a time span of just four years the two parks are to be completed and be connected to the grid – with only one year of grace for the time of construction. Obviously, the Danish company is very sure to bring the two projects quickly and without a hitch to an end.

The special feature of the two wind farms, however, will be their price – because it will be far below anything that was calculated in advance: The construction of the farms will cost a total of EUR 2.7 billion less than estimated. But DONG promises to produce 22.5% more electricity as calculated in advance, as emphasized by the Dutch government. The price of the electricity itself is even lower: DONG submitted 7.27 Cent/kWh – 5.1 Cent less than originally planned. Thereby, in the 15 years the wind farm gets subsidies from the government, they are saving another EUR 2.3 billion making the farms the cheapest in the world. This is likely the result of the rapid development of the industry in recent years. Improved production processes and growth characterized by innovation has contributed to this development.

Samuel Leupold, Executive Vice President and Head of Wind Power in DONG Energy, commented on this fact: “Winning this tender in a highly competitive field of bidders is another proof of our market-leading position and our business model which builds on continued innovation, industrialisation and scale. With Borssele 1 and 2, we’re crossing the levelized cost of electricity mark of EUR 100 per MWh for the first time and are reaching a critical industry milestone more than three years ahead of time. This demonstrates the great potential of offshore wind.”

The Dutch government, however, doesn’t want to rest on this success and is poised for further growth in the offshore industry. The ambitious goal is to get 16 percent of the country’s energy mix from renewable sources by 2023. Therefore, the next tender was already announced directly after the successful completion of the first one.

In the two areas Hollandse Kust Zuid (South) and Hollandse Kust Noord (North) wind farms are to be built with a capacity of up to 2.1 GW. The southern area which is due to be tendered in 2017 covers an area of 355 km2 where up to four parks – each with 350MW – can be built. The northern area is designed for two parks of the same size and will probably be tendered in 2019.

Hollandse Kust Zuid und Hollandse Kust Noord (Image: TenneT)

Country Manager for DONG Energy Netherlands, Jasper Vis, is happy about this development: “The Dutch government has introduced an ambitious, long-term development plan for offshore wind. The Borssele concessions mark a milestone in the Netherlands’ shift towards green energy, and we look forward to bringing our more than 20 years’ experience with offshore wind into these projects.”

After the wind farms are finished they will be able to feed their electricity directly into the grid, thus the Dutch-German grid operator TenneT recently announced massive investments in the Dutch electricity grid. The company plans to invest more than EUR 6 billion in the next ten years. The money will be used both for the connection of offshore wind farms, but also for the expansion of power lines onshore and for international projects. New transmission lines will be built across the borders of Belgium and Germany. Furthermore, the idea of a super grids across North Western Europe is to be promoted to provide a close link of the entire North Sea Region in order to distribute the electricity where it is needed most.