Dutch offshore wind auctions show progress towards ambitious targets
The Netherlands is showing progress towards its ambitious offshore wind target of 21 GW installed capacity by around 2030 but more work is needed if the country is to reach its goal of decarbonising the power sector in just over 10 years.
The Dutch government in June announced the winners of two offshore wind projects in the North Sea that will have a combined capacity of 4 GW. The wind farms are expected to be put into operation in 2029 and will contribute to the country’s goal of reaching 21 GW of installed capacity by 2032, up from less than 5 GW currently.
Over 4% of the Dutch North Sea will be needed for these wind farms, according to the government.
In the latest auction, Zeevonk, a joint venture of Vattenfall and Copenhagen Infrastructure Partners (CIP), were awarded a permit to build a 2 GW offshore wind farm in the IJmuiden Ver Beta area in partnership with Copenhagen Offshore Partners (COP). The project includes a 1 GW electrolyser in the Maasvlakte industrial area in Rotterdam which will produce green hydrogen for heavy industry and transport, according to plans.
Moreover, Noordzeker, a consortium of the pension funds ABP, APG and energy company SSE Renewables, were in the auction selected to progress with their 2 GW Alpha offshore wind tender site, also in the IJmuiden Ver Beta.
The area is 62 km from the coast and is connected to the offshore power grid with connections to land, to Maasvlakte and Borssele respectively.
However, both projects are pending final investment decisions (FIDs) before construction can go ahead.
“We’re currently working hard to get the project FID-ready, we cannot comment on a concrete date at this stage,” a spokesperson for Vattenfall told Gas Outlook.
Nevertheless, amid increasing costs and supply chain issues, the result of the offshore wind auction is welcome news for the Netherlands.
“It was great to see good bids coming in for the IJmuiden Ver area, since there was a bit of a worry about the economic conditions to bid subsidy-free. The low number of bids – two for each of the 2 GW lots – did confirm that the conditions are challenging,” Kees van der Leun, managing director at consultancy Common Futures, told Gas Outlook.
“I would expect both winners to follow through on these investments; they are combinations of large and reputable companies that will make every effort to get the wind farms and electrolyser built,” he added.
The next round of Dutch offshore wind auctions is also for 4 GW, in the North Sea areas of IJmuiden Ver Gamma and Nederwiek, van der Leun notes.
“We expect the first invitation to bid in Q4 of this year, and a final decision by the end of 2025,” he said.
LNG-hungry nation
The bet on offshore wind comes as the Netherlands is becoming increasingly dependent on LNG amid the curtailment of Russian supplies and the closure of the Groningen gas field which is expected to shut permanently in October of this year. To this end, the Netherlands is adding new LNG import capacity and there are plans to extend operations of the Eemshaven LNG plant beyond 2027.
Dutch energy storage company VTTI and Norwegian shipping company Höegh LNG announced in December 2023 that they plan to develop an LNG import terminal in Zeeland, which would be the country’s third and add 7.5 bcm/year of capacity. The terminal will be based on a Floating Storage Regasification Unit (FSRU) and could be operational by the second half of 2027.
The two existing FSRUs are at Eemshaven with a combined capacity of 8 bcm/year. Moreover, the capacity of the existing Gate terminal in Rotterdam has been expanded by 4 bcm/year to 16 bcm/year. The plan is to expand the capacity of Eemshaven and Gate further, to a total of 30 bcm/year by 2026 (Gate 20 bcm/year).
At the same time, the Netherlands has set a goal of decarbonising its power system by 2035.
Central to this plan — in addition to offshore wind — is boosting solar power capacity and battery storage, converting gas-fired power plants to run on hydrogen and phasing out coal in electricity by 2030. Two new nuclear power plants are also part of the decarbonisation plan, supported by the coalition government led by populist Geert Wilder.
The task to reach a zero-emission power system is daunting though. So far this year, about 45% of electricity generation in the Netherlands was from fossil fuels, mostly natural gas, according to Eurelectric data. More specifically, coal accounted for 5%, gas for 37%, nuclear less than 3%, bioenergy 5%, solar power 20%, onshore wind 14%, and offshore wind 13%, according to Eurelectric.
Hydrogen ambitions
As for hydrogen, the European Commission in July approved, under EU State aid rules, a 998 million euro Dutch scheme to support the production of renewable hydrogen. The scheme will support the construction of at least 200 MW of electrolysis capacity.
The EC said the scheme will contribute to the Netherlands’ efforts to achieve 500 MW of electrolyser capacity in 2025 and 3-4 GW by 2030.
To this end, van der Leun noted that there are two upcoming demonstration projects for offshore electrolysis to look out for. For the first one, a 30-50 MW demonstration project, to be connected to the existing Hollandse Kust Noord wind farm by 2030, the criteria for selecting a development consortium will be published later this year. For the second one, a 500 MW electrolyser to be connected to a new North of the Wadden Islands wind farm, a tender is expected in 2027, for start of operations around 2033, he said.