Policy and Challenges of Offshore Wind

René MoorMinistry Economical Affairs and ClimateProgramme manager Offshore Wind Energy

Overview› Road Map 2023

o Main characteristics

o Tender results

› Road map 2030o Challengeso Projectso Climate

agreement

› New offshore Wind Energy Act and Tender 2018

Wind Days 2018 2

Wind Days 2018 3

The Netherlands at a glance

Strong supply chain

Excellent ports

Good wind resource

Shallow waters (<40 m)

Easy soil conditions (sandy)

Hurricane, earth quake and tsunami free

Wind Days 2018 4

2018

Wind Days 2018 5

2023

Wind Days 2018 6

2030

Wind Days 2018 7

Tender results until nowResults of first 3 tenders exceeded expectations:

Ørsted wins Borssele I & II at strike price of € 72.7/MWh

Blauwwind II wins Borssele III & IV at strike price of € 54.5/MWh

Chinook wins Hollandse Kust (zuid) I & II, first non subsidized OWF world wide

8Wind Days 2018

Roadmap 2030Wind farm zone

GW Start permit

Tender

Oper.

HollandseKust (west)

1.4 2018 2021 2024/25

Ten Noordenvan de Wadden

0.7 2019/20

2022 2026

IJmuiden Ver 4 2020 2023 2026

2027 -2030

t.b.d. ~0.9 t.b.d. t.b.d. t.b.d.

Wind Days 2018 9

Key challenges› Need for master plan North Sea:› Ecology limits further growth of offshore

wind

› Fisheries concerned

› Other activities

› Further growth only sensible with additional demand for electricity:– Electrification of processes– Substitution of fossil-based fuels and

feedstock

› Limitations in onshore grid: congestion and spatial issues

Wind Days 2018 10

Many activities, interests and values

Ecology

Fisheries & aquaculture

Oil and gas

Offshore grid

Wind energy

Shipping

Sand and shell mining

(Telecom) cables

Recreation

Aviation

Culture and historical values

Military

Wind Days 2018 11

Ecology› Birds most critical:

– At this point room for 6,1 GW

– Expect to find room for 7 GW

– More than 7 GW: Larger turbines Other way of dealing with EU

Bird- and Habitat Directives

› Designation of “Bruine Bank” as N2000-area

12Wind Days 2018

Integration in onshore grid› 6,1 GW can be accommodated:

– 1,4 GW Hollandse Kust (west)– 4,0 GW IJmuiden Ver– 0,7 GW Ten noorden van de

Waddeneilanden

› 7 GW if we accept congestion (measures)

› > 7 GW only possible if– Connection (far) inland (HVDC), and/or– Electrification of processes– Substitution of fossil-based fuels and

feedstock– Conversion and storage (e.g. H2).

13Wind Days 2018

?

?

?

Fisheries and aquaculture› Weighing of interests in 2009 and

2014 with designation of wind farm zones

› Dragnet fishery sector influential› Coalition agreement demands to

spare fisheries› Possible solutions:

– Allowing fishing within wind farms?– Transition fund– Substitution by other fishery methods

and aquaculture?– Designating wind farm zones outside

fishing grounds?

Wind Days 2018 14

Oil and gas extraction› Limitations due to manoeuvring

space helicopters

› Possible solutions:– Other flight procedures and flight paths– Using boats instead of helicopters– Dismantling platforms

› Under study: possible synergies with CCS and electrification gas platforms

Wind Days 2018 15

Shipping› Extension and standardisation of

rules for passage through wind farms (<45 m?)

› Shipping corridor through IJmuiden Ver for east/west traffic (ferries)

› Need for assessment framework for co-use of wind farms

Wind Days 2018 16

Road Map 2030: Stakeholder process

Wind Days 2018 17

stakeholder consultation

6 April:reconnaissance

20 June:deepening

start

Decision making

5 October:update

2017 2018

Implementation

Analysis and substantiation

March/April:explanation

• Implementation agenda• Divide Wind Farm Zones into Sites and leftover space (for now) • Design of offshore grid (TenneT)• Locations and cable routes offshore grid (offshore and onshore)• Update of Ecology and Accumulation Framework• Update Development Framework for Offshore Wind Energy• Policy decisions on passage (shipping corridors?) and co-use (e.g.

fishing?) of Wind Farm Zones

• Start procedures Wind Farm Site Decisions• Start procedures permit granting (tenders)• Operational from 2024 onwards

Implementation Roadmap 2030

Wind Days 2018 18

• 2030 Road Map is starting point• Arrangements for key challenges

• Matching supply and demand• Creating ecological ‘space’• Grid connection: congestion and spatial planning on shore

2018 National Climate Agreement

Wind Days 2018 19

New offshore Wind Energy Act and Tender 2018

Wind Days 2018 20

› Tender 2018: sites III and IV Hollandse Kust (zuid): – 2x 350 MW, build 2023

› Tender 2019: site V Hollandse Kust (noord): – 700 MW, build 2023/2024

› Tender(s) (2020/)2021: – 1.400 MW Hollandse Kust

(west), build 2024/2025, – Sites VI and VII, 700 MW

each?– One or two tenders?

› Tender 2022: – 700 MW Ten noorden van de

Waddeneilanden, build 2026, – Site I, 700 MW

› Tender(s) 2023-2026: – About 4.000 MW IJmuiden

Ver, build 2027-2030, – Sites I-IV, 1.000 MW each (2

GW DC export cables assumed)?

– Two or four tenders?

Product design: size sites and tenders

21

› Two procedures forgranting a permit– with subsidy and– without subsidy (comparative

assesment)

› Tenders with subsidy in 2015 and 2016:– 2015 € 0,0727 / kWh and– 2016 € 0,0545 / kWh

› Tender 2017 without

subsidy (comparativeassesment)

Offshore Wind Energy Act now

22

› When ranking applications Our Minister shall consider: – a. the knowledge and

experience of the parties involved (10);

– b. the quality of the design for the wind farm (10);

– c. the capacity of the wind farm (10);

– d. the social costs (10);– e. the quality of the survey

and analysis of the risks (20);– f. the quality of the measures

to ensure cost-efficiency (40).

› Details in Appendix to Article 5(1) of the Ministerial Order for permitting offshore wind energy permits without subsidy (https://offshorewind.rvo.nl/file/download/54543032)

Comparative assesment tender 2017

23

› Was it possible to see differences between the four applicants? Yes!– How the expert committee

would evaluate the applications was kept secret.

– All parties asked for a manual how to get the perfect score, but this was kept a secret.

– First meeting of committee (without knowing the bids offcourse) they decided that 50% of total points was for risks on electricity price

– 25% of points for risks during construction and 25% of points for exploitation period.

– Chinook (Nuon Vattenfall) was the best in mitigating the risks for the electricity price.

Comparative assesment tender 2017

24

› No, next time we will have to do something else

› The permits are not irrevocable, and parties try to find out what was in the application of Chinook

› Hopefully new law very soon

Can this system be used again easily?

25

› Section 14a– A permit shall be granted

through the application of the: a. procedure for grant

funding (old: ‘with subsidy’);

b. procedure for a comparative assessment (old ‘without subsidy’, amended);

c. procedure for a comparative assessment with financial bid (new);

or d. auction procedure

(new)

› English translation available at: https://www.internetconsultatie.nl/wijzigenwetwindenergieopzee

Amendment of the Offshore Wind Energy Act

26

Amendment of the Offshore Wind Energy Act (2)

› Auction is a new element in the Act› The way an auction will be held is still under

discussion› One of the issues to be discussed with the

windsector is the question of multi versus single round auction.

The tender 2018/2019

› Under new Act Offshore Wind Energy› Ambition: operational early 2019, no delay in

tender agenda.› But: dependant on speed political decision

making in parliament. › Sector should have enough preparation time

for preparing applications.

Planning process to the tender 2018/2019; ‘speed track’

› Involvement of the windsector

› Political decisionmaking

› Tendering process

1. Phase 1: Involvement of the windsector

From end of June till end of July: › Workshops with the sector to work out specific themes› Possibility for bilateral talks between stakeholders and off shore wind team

EZK

End of August/mid-September:› Consultation of draft for ministerial rule regarding tendering windfarms

Phase 2: Political decision makingBeginning of October: Ministerial order submitted to minister of EZK for approval

Mid October; After ministerial approval: informal publication of ministerial rule on internet RVO

November/December:Official publication of ministerial rule, immediately after approval altered Off Shore Wind Energy Act in parliament

Phase 3: Tendering process

1st of Januari 2019: › Ministerial rule operational, immediately after Offshore Wind Energy Act› Opening of tender Hollandse Kust Zuid, farm sites 3 and 4

Mid Januari 2019: › Closure of tender

Mid April (ultimate):› Publication of winner tender

Threats to the ‘speed track’Delays in the political process concerning the Offshore Wind energy Act: › Advice of the ‘’Raad van State’’ after summer› Decisionmaking in first or second chamber of parliament takes

more time

Time to irrevocable Wind Farm Site Decision

34