Dutch Government offers pragmatic solution in reaction to zero bids in German wind tenders

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

In reaction to the zero bids submitted in the German offshore wind tenders last April, the Dutch government announced that it will be necessary to amend the award criteria for the upcoming tenders; the current award criterion (i.e. the lowest subsidy) cannot be maintained. However, the broader offshore wind legal framework already offers the possibility - as an alternative for the current tender process with subsidy - to call for a tender process without subsidy. The procedure for a tender without subsidy 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 on 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 will be further specified in a Ministerial Order.

This pragmatic solution may also apply to the 2018 tender. A structural solution will however require amendment of the Offshore Wind Energy Act. The Minister has announced that he will set the legislative amendment of the Offshore Wind Energy Act into motion for his successor. For more information, please contact the authors.