Dutch Government opts for pragmatic solution in reaction to German zero bids

The Dutch Minister of Economic Affairs has announced that the 2017 Hollandse Kust offshore wind tender shall take place this autumn as originally scheduled and has come up with a solution for zero bids.

In reaction to the zero bids that were submitted in the German offshore wind tenders last April, the Dutch government announced to amend the legal framework. Amendment was deemed necessary since it cannot be excluded that zero bids will be submitted in the upcoming tenders. Consequently, the current award criteria for tenders (i.e. the lowest subsidy) cannot be maintained. However, the broader offshore wind legal framework already offers the possibility - as alternative for the current tender process with subsidy - to call for a tender process without subsidies. Such procedure is based on the following award criteria:

1. knowledge and experience of parties involved;
2. quality of the design for the wind farm;
3. wind farm capacity;
4. social costs;
5. quality of the identification and analysis of risks;
6. quality of measures to safeguard cost-effectiveness.

Given the current uncertainty whether zero bids will be submitted in the 2017 tender, the Minister has indicated that both tender procedures will be applied in the upcoming tender; first the tender without subsidy, followed by the tender with subsidy. During the coming months these criteria shall be further specified in a Ministerial Order. This pragmatic solution shall be applied for the 2017 tender and possibly also for the 2018 tender. A structural solution will require amendment of the Offshore Wind Energy Act. The Minister has announced that he will set the legislative amendment of this Act into motion for his successor.