Connect with us

Hi, what are you looking for?

The Netherlands will open bids this week for 700 megawatts of offshore wind power. It hopes that some or all of the bids will be for subsidy-free power.

Clean Power

Netherlands First To Hold Subsidy-Free Wind Power Auction

The Netherlands will open bids this week for 700 megawatts of offshore wind power. It hopes that some or all of the bids will be for subsidy-free power.

This week, authorities in the Netherlands will unseal bids to construct two 350 megawatt offshore wind turbines. The total cost of the systems is expected to exceed $2.7 billion. They hope at least some of the bids will be for wind power that does not rely on any subsidies at all. If that happens, it will be the second time that subsidy-free wind energy bids have been received. At a recent auction in Germany, Ørsted and Energie Baden-Wuerttemberg submitted bids to build offshore wind farms that would be subsidy-free.

offshore windHow is such a thing even possible? There are two factors at work, according to Bloomberg. First, wind turbine manufacturers are building new wind turbines that are much larger and more efficient than older turbines. That lowers the cost of construction. Second, Europe is about to begin implementing a carbon fee system that is expected to make electricity from coal-fired plants more expensive. The carbon price will be set at 18 euros per metric ton of carbon dioxide beginning in 2020 and will rise to 35 euros per metric ton by 2030.

At the present time, the wholesale cost of electricity is $45.92 per megawatt-hour. The carbon fee is expected to make coal fired plants less competitive, causing many of them to shut down. That will raise the average price for electricity enough to allow developers to build subsidy-free wind farms and still make a profit.

Dutch regulators admit their subsidy-free model may mean that no bids are submitted, in which case a subsequent auction with traditional subsidies included will take place in January of next year. “We are curious to see if there will be credible zero subsidy bids,” says Sandor Gaastra, energy director for the Dutch Ministry of Economic Affairs. “It is possible that we don’t get bids at all. The market has to calculate the risk.”

In the recent German auction, the proposed wind farms don’t need to be brought online until 2024. Industry experts expect wind turbines by then will be even larger and more efficient than those available today. But the Dutch proposals call for the projects to be completed two years earlier, before the next generation of turbines is available. “Wind energy will almost certainly be free of subsidies in the long term and there is a sense in the market that zero subsidy bids might already emerge at this tender,” the president of Dutch wind energy association NWEA, Hans Timmers, told Reuters. “But for now, no one can tell.”

Sweden’s Vattenfall has called the auction a “big gamble,” but says it will participate. Dutch energy company Eneco says it is too soon for bids without subsidies because the costs of offshore wind farms have not fallen far enough yet. It did not rule out bidding, however, and several other companies are sniffing around the auction as well. By Friday, we should now if subsidy-free wind power is really a viable option in Europe.

Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.

Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else the Singularity may lead him. You can follow him on Twitter but not on any social media platforms run by evil overlords like Facebook.


You May Also Like

Clean Power

Today, the EU is investing over €1.8 billion in 17 large-scale innovative cleantech projects with a third round of awards under the Innovation Fund....

Clean Power

As the Russian Baltic Fleet rattles its sword, renewable energy stakeholders in Sweden and elsewhere are eyeballing Baltic Sea offshore wind for a foothold...

Clean Power

Modvion is building wooden towers for wind turbines, and the leading forest products firm Stora Enso is among those lending a hand.

Clean Power

This new high-tech lift will cut the cost of offshore wind even farther, faster if all goes according to plan (image courtesy of Seaqualize).

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.