What you need to know about the Dutch offshore wind tenders (in five steps)

Published

Mar 23 2016

Lars Kyrberg

Partner
Germany

In 2013, the Dutch government signed an Energy Agreement with a wide range of parties involved in the energy market. The Dutch Government aims to increase the country's offshore wind capacity from 1,000 MW to 4,500 MW by 2023, which is an important part of this Energy Agreement. (See also "Still time for Dutch offshore wind”)
Five offshore wind farm zones have been designated for the development of new wind farms and this scheme has been launched to facilitate the establishment of these farms:
- 2016 Borssele Wind Farm Zone 700 MW, Sites I and II (originally scheduled for 2015)
- 2016 Borssele Wind Farm Zone 700 MW, Sites III, IV and V
- 2017 Hollandse Kust Zuid Wind Farm Zone 700 MW
- 2018 Hollandse Kust Zuid Wind Farm Zone 700 MW
- 2019 Hollandse Kust Noord Wind Farm Zone 700 MW
A permit is required for the build and operation of a wind farm. An application for a permit must be submitted together with the application for a subsidy. The permit is granted to the party that receives the subsidy.
This first round of tenders is for Borssele Wind Farm Sites I and II, 22 kilometres off the coast of Zeeland. The offshore wind farms built on these sites will have a capacity of 350 MW per site.

The subsidy and permit application forms will be available at the opening of the tender round, a model application is available at www.RVO.nl. Please note: Application forms and explanation are in Dutch. You are allowed to fill out the form and appendices in English. (See here for English version model application form).
The application forms require a project plan, a wind energy yield calculation issued by an independent agency, an operational calculation, financial statements (prepared within the last three years) and a financial plan.
Applicants need to be able to demonstrate that their project is technically and financially achievable within the time stipulated in the permit and that the building and exploitation will commence within four years after the permit has become irrevocable.
Subsidies and permits for the development of wind farms will be awarded to the lowest bid that meets all criteria.

The winner of the tender must enter into a Realisation and a Connection and Transmission Agreement with TenneT. TenneT has been appointed as the Dutch offshore wind system operator and will be responsible for the building of five standardized platforms of 700 MW each, these will be connected to the onshore high voltage grid by two 220kV-cables. Each TenneT platform will connect two wind farm sites to shore. The model TenneT agreements are available at http://www.tennet.eu/nl/nl/net-projecten/projecten-in-nederland/net-op-zee/consultatie-proces/juridische-onderwerpen.html.
The winner of the tender must sign an agreement with the Dutch State (“ Uitvoeringsovereenkomst”) within two weeks after the issue date of the subsidy award in order to guarantee that the subsidized activities will commence in due course and therefore must submit:
- A bank guarantee for compliance with timely operation of the production installation or the payment of a 10 million Euro fine of an EU based bank laid down in a model bank guarantee within 4 weeks after the issue date of the subsidy award.
- A bank guarantee for compliance of 35 million Euro within 12 months after the issue date of the subsidy award. If the bank guarantee is not issued the penalty is 10 million Euro.

Regulatory: the permit and the subsidy decision may be appealed as well as the underlying site decisions (See also Certainty for bidders in the tender)
Contractual: delay of the grid connection or restriction of transmission capacity as agreed with TenneT (in both cases TenneT can be liable regardless of negligence or fault)

Opening of the subsidy and permit tender for Borssele Wind Farm Sites I and II is expected in April 2016 (see also: Offshore Wind Speedy Bill passed by the Dutch Senate)
Opening of the subsidy and permit tender for Borssele Wind Farm Sites III and IV is expected in August 2016.