Shell Prepares to Set Sail with Offshore Wind Investment as Consortium Secures Dutch Contract

World | Wind Energy

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The Netherlands’ position as an emerging hub for low cost offshore wind farms received a further boost this week, as a consortium secured the rights to develop a new 700MW project with one of the lowest bids ever recorded.

The Borssele 3&4 offshore wind farm is now set to be built by a consortium featuring Shell, Van Oord, Eneco and Mitsubishi/Diamond Generating Europe following a winning strike price bid excluding transmission costs of €54.50/MWh.

The bid further underlines the rapid reduction in costs being seen across the offshore wind sector. The first project in the Borssele zone was secured earlier this year by DONG Energy with a then record low bid of €72.70/MWh.

The new project is scheduled for commissioning in 2020 and is the second of five auction rounds planned by the Netherlands as it seeks to deliver 4.5GW of offshore wind capacity by 2023.

The government said the level of subsidy required by the project stood at €300m, a fraction of the €5bn that was originally envisaged.

“With this second wind farm in the Borssele Wind Farm Zone, the subsidy savings are even higher than for the first 700 MW wind farm, which at the time was set to be the world’s cheapest offshore wind farm,” the government said in a statement. “Moreover, with the current energy price outlook, the second wind farm in Borssele can be operated without subsidy after 7.5 years.”

Announcing the tender result, Henk Kamp minister for economic affairs said the project showed how the Dutch government’s goal of delivering renewables that compete with fossil fuels without subsidy was “within reach”.

“The Netherlands is a front runner in the development of offshore wind energy, creating many opportunities for the Dutch industry,” he added. “With these winners this becomes even more clearly visible.”

He said that as the country’s full pipeline of offshore wind projects is delivered it is expected to create around 10,000 jobs by 2020. “Dutch industry is involved in the construction of almost all offshore wind farms in Europe,” he said. “Last week the Government presented the Energy Agenda, which sets out our route towards a low carbon energy supply. The results of this latest tender demonstrates that the energy transition offers ample economic opportunities.”