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Tender regulation published for the upcoming Dutch offshore wind tender

07/12/2018

On 3 December 2018, the Minister of Economic Affairs and Climate published the procedure for the offshore wind tender for the sites Hollandse Kust (zuid) III & IV.

This tender will open on 1 March 2019 for a period of two weeks. Following the successful 2017 tender procedure for Hollandse Kust (zuid) I & II, this new tender will again be subsidy-free.

In this tender process, wind permits will be awarded on the basis of a comparative test, resembling the previous tender for the Hollandse Kust (zuid) I & II sites, which was won by the Swedish power company Vattenfall.

Tenderers can score a maximum of one hundred points over seventeen different criteria divided into six categories: 1) knowledge and experience; 2) design quality of the wind park; 3) park capacity; 4) social costs; 5) risk analysis; and 6) measures to safeguard cost efficiency. The tenderer with the highest score will be awarded the wind permit.

The tender regulations include additional requirements in regard to eligibility and define the weight that will be granted to the ranking criteria described above. As in the previous tender, the quality of cost efficiency measures, risk assessment and analyses are highly valued and are therefore given greater weight than other criteria. The reason for this is that these criteria are expected to guarantee a timely start of the wind-park operation and successful continuity during the operational phase.

Although this tender will resemble the previous one for Hollandse Kust (zuid) I & II, some changes have been made to make it more transparent for tenderers. As noted in our article on the previous tender, transparency and the rationale for the allocation of points was limited in that tender, which resulted in complaints from non-successful tenderers. To decrease the risk of similar complaints, this tender will have a maximum score set for the risk-analysis and cost-efficiency criteria, and these factors will be weighed in percentages on a continues scale.

Also for reasons of transparency, a gradual scale will be applied to the other criteria. It remains to be seen if these changes will result in a sufficiently transparent award decision, which will dissuade non-successful tenderers from filing a complaint.

A new element of this upcoming tender is that, due to the fact that roughly 70% of the sites are located within Dutch territorial waters, a right of superficies will have to be established for the winning tenderer. As a consequence, a fee of €0.98 per MWh of electricity produced by the wind park (indexed) will be charged for the use of the seabed within Dutch waters. This fee is under state aid legislation required to be in conformity with the market and will be considered in the assessment of each tenderer's equity capital and the financial feasibility of the envisaged wind park. The deed of superficies is expected to be published in mid-December.

The right of superficies fee will significantly increase costs for the development and operation of the wind parks, which according to the Netherlands Wind Energy Association could undo the massive cost reduction accomplished by the industry in recent years.

If after 14 March 2019 there are no acceptable subsidy-free bids, a second tender procedure including subsidies will be initiated for sites Hollandse Kust (zuid) III & IV.

Authors

Picture of Cecilia Weijden
Cecilia van der Weijden
Partner
Amsterdam
Maartje-Speksnijder-CMS-NL
Maartje Speksnijder
Advocaat
Amsterdam
Marcellina-Rietvelt-CMS-NL
Marcellina Rietvelt
Advocaat
Amsterdam