Ørsted could U-turn on Dutch farm

Last year, a subsidy-free offshore wind project seemed far-fetched to Ørsted. Now the utility is considering bidding on a similar project to be installed shortly after.
Photo: PR Ørsted
Photo: PR Ørsted

Ørsted is considering bidding on Dutch offshore wind project Hollandse Kust Zuid 3+4 before the March 14. deadline.

"There are still some weeks ahead before a deadline for bids. We have not yet decided whether we will deliver an application to the beauty contest, but we are currently in the process of evaluating this," says CEO Henrik Poulsen.

By "beauty contest", Poulsen is referring to the tough bidding round. Dutch authorities have previously announced that zero-subsidy bidders have precedence, and, without a price to compete on, developers must instead compete on other parameters such as experience, design quality and social costs.

The developers' main consideration is whether earnings will end up bigger than the actual costs. Ørsted was the first to answer yes, when in April 2017 it secured two German offshore wind projects to be installed in 2025. On the other hand, the Danish utility did not bid on Hollandse Kust Zuid 1+2 last year.

"It [Hollandse Kust Zuid, -ed.] is a lottery ticket. You are fumbling in the dark. Therefore, we decided not to participate. But it will be interesting to follow, but you either have very optimistic electricity price prerequisites or you are under huge pressure to find ways to sell power," says Ørsted's offshore wind president, Martin Neubert, to EnergyWatch.

Meanwhile, the conditions for the two projects are identical, however, naturally with the exception that they are delayed – albeit to a relatively limited extent. According to the Dutch tender conditions, the project must be fully operational no later than five years after the authorities issue the final permit to the developer.

After Vattenfall won the beauty pageant for Hollandse Kust Zuid 1+2 the previous December, the Swedish utility received a permit on 19 March last year. The project must be fully commissioned by March 19, 2023. If the Dutch authorities keep up the same pace from bid deadline to distribution of permits, the follow up project will be in operation one year later.

English Edit: Lena Rutkowski

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