AFRY’s study supports Dutch Ministry of Economic Affairs and Climate Policy decision making for IJV Gamma and Nederwiek I offshore wind tender procedures
On May 31, 2024, the Dutch Minister of Economic Affairs and Climate Policy released a Letter to Parliament detailing the tender procedures for the offshore wind projects IJmuiden Ver Gamma and Nederwiek I, to be held in Q3 2025. To support this, AFRY was commissioned to carry out a study analysing current uncertainties and risks in the Dutch offshore wind market. The study found that while the Netherlands offers an attractive tender setup, there are challenges impacting the business case. AFRY proposed seven key recommendations to improve the market environment, which have been largely adopted by the Minister in the Letter to Parliament.
AFRY used its international offshore wind expertise and interviews with key Dutch industry players to evaluate eleven sensitivities, assessing the impact on the levelised cost of electricity (LCOE) for offshore wind without subsidies, also taking into account changes in revenue streams. The study also compared Dutch offshore wind tender processes with those in Denmark, Germany, and Great Britain.
AFRY recommends the Comparative Assessment for the IJmuiden Ver Gamma and Nederwiek I tenders for several reasons: a) The comparative assessment tender procedure has previously worked well, with positive feedback on qualitative criteria; b) Implementing the seven key recommendations is expected to improve the business case; and c) AFRY's analysis suggests that removing the financial bid element will likely encourage broader participation. AFRY also recommends exploring a procedure with subsidies and preparing to include this option in future tenders, should market conditions further worsen the business case.
Altogether, AFRY’s study provides seven key recommendations to aid the decision-making process for IJmuiden Ver Gamma and Nederwiek I and to encourage a viable business case:
- Investigate technical feasibility of allowing a longer build time for Dutch offshore wind farms following award being granted.
- Encourage innovation from the market by using qualitative criteria to focus on a holistic approach.
- Investigate measures (both internal and external to the tender) to stimulate growth in electricity demand to match the increase in planned offshore wind capacity.
- Revisit the existing tender criteria to consider including targeted measures to optimise the production profile.
- Make considerations around turbine size and encourage standardisation.
- Investigate the feasibility of reducing tendered site sizes to 1GW to reduce the associated risk, allow more developers to participate and have a chance of being awarded a site.
- Consider introducing a targeted campaign to address personnel shortages to reduce rollout bottlenecks and associated costs.
Read the Public Report here.
Background
As part of the Energy Act (14A – research of market conditions), the Ministry of Economic Affairs and Climate Policy requires a review of the tendering process before every offshore wind tender. AFRY’s study was undertaken during March and April 2024 and builds on work undertaken in 2020 by AFRY for the Ministry of Economic Affairs and Climate Policy looking at the business case and supporting interventions for Dutch offshore wind.
As part of the analysis, the study took into account the views of a number of players in the Dutch offshore wind industry, including (listed alphabetically): BP, Eneco, Orsted, RWE, SSE, Vattenfall, and Vestas.
AFRY’s offshore wind expertise
AFRY is a leading consultancy in the offshore wind sector, offering technical, commercial, environmental, owner's engineering and advisory services for offshore wind projects across Europe, the USA, and Southeast Asia. With over 30 years of experience in the field, AFRY is a leading provider of consulting services for the offshore wind power sector. AFRY operates globally on policy and market design, offering commercial analysis, due diligence, strategic and operational advice to private investors and operators, state-owned entities, governments, and regulators.
AFRY’s services encompass the full project lifecycle for offshore wind projects, including feasibility studies, project development, contracting, financing, construction, operations and maintenance (O&M). AFRY also offers full bid support and tender management.
For further information, please contact:
Fleur Greetham, Director, AFRY Management Consulting, fleur.greetham@afry.com
Imke Maassen van den Brink, Director, AFRY Energy, imke.maassenvandenbrink@afry.com
Press enquiries:
Abigail Speak, Head of Communications, AFRY Management Consulting, abigail.speak@afry.com
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