On 28 June 2017 the Minister of Economic Affairs (‘MEA’) submitted a letter to Parliament regarding an adjusted approach to the offshore wind energy tenders (please see our previous EnergyBits and/or our brochure on offshore wind energy for more information).

In deviation of the previous (Borssele I/II and III/IV) tenders, the MEA opts for a first round subsidy-free tender system and if no, or non-qualifying applications are submitted in the first round a second round (fall back) subsidy-based tender for future concessions will follow shortly. The adjusted legislation should be in place for the tender of the Hollandse Kust Zuid sites I and II, which is planned to open in the third quarter of 2017.

The announcement of the MEA to opt for a subsidy-free tender system is prompted by recent developments in Germany where offshore wind farm projects have been rendered for 0.00 ct/kWh.

Subsidy-free tender: procedure and requirements

Current offshore wind energy legislation already caters for the possibility of a subsidy-free tender procedure (as described in par. 3.3 of the Offshore Wind Energy Act (‘OWEA’)).

If more than one applicant applies for a permit in a subsidy-free tender procedure, the subsidy will then be awarded to the applicant whose application ranks highest in inter alia quality. In a subsidy-free tender procedure, the ranking mechanism takes into account the requirements laid down in (article 24 of) the OWEA.

These requirements are:

  1. the knowledge and experience of parties involved;
  2. the quality of the design for the wind farm;
  3. the capacity of the wind farm;
  4. the social costs;
  5. the quality of the survey and analysis of the risks;
  6. the quality of the measures to ensure cost-efficiency.

Future legislative developments

The letter of the MEA also mentions a further elaboration (in the form of a ministerial regulation) on the specifics of the subsidy-free tender procedure laid down in the OWEA. This will cover details on the operational aspects, assessment criteria, and determination of weighting factors.

The aim is to implement the adjustments within the next months, which should enable the first following tenders of 2017 (Hollandse Kust Zuid I and II – 700MW) and 2018 (Hollandse Kust Zuid III and IV – 700MW) to start with the adjusted subsidy-free tender procedure.

For the envisaged amendment of the offshore wind energy legislation, in particular in view of the development of declining costs of offshore wind energy, the OWEA will need to be amended formally.

However since the national elections of March 2017, a caretaker government is currently in place. According to the MEA, draft legislative amendments will be made in preparation for his successor. Until the inauguration of a new cabinet it is currently not possible to amend offshore wind energy legislation.