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DONG grows with Borssele I&II win

By: Tom Russell 06/07/2016 Dutch Government edited by 4C Offshore

General Windfarms

The Netherlands’ Minister of Economic Affairs has awarded DONG Energy the concession to build the Dutch offshore wind farms Borssele I and Borssele II 22km off the coast of Zeeland. DONG Energy won the concessions with an average bid strike price, excluding transmission costs of 72.70 EUR per MWh during the first 15 years of the contract. After that, the wind farms will receive the market price.

Executive Vice President and Head of Wind Power in DONG Energy, Samuel Leupold, says:“Winning this tender in a highly competitive field of bidders is another proof of our market-leading position and our business model which builds on continued innovation, industrialisation and scale. With Borssele 1 and 2, we’re crossing the levelized cost of electricity mark of EUR 100 per MWh for the first time and are reaching a critical industry milestone more than three years ahead of time. This demonstrates the great potential of offshore wind.”

DONG Energy will, in accordance with the Dutch tender regulation, build both wind farms within four years from today with a flexibility of one year. The greater part of the construction is expected to be conducted from the port of Vlissingen.

Country Manager for DONG Energy Netherlands, Jasper Vis, says: “The Dutch government has introduced an ambitious, long-term development plan for offshore wind. The Borssele concessions mark a milestone in the Netherlands’ shift towards green energy, and we look forward to bringing our more than 20 years’ experience with offshore wind into these projects.”

The cost of building and operating the Borssele offshore wind farms is expected to be EUR 2.7bn (GBP 2.31) cheaper than previously estimated. Moreover the combined 700MW project will generate 22.5% more electricity than anticipated, meeting the annual power consumption of approximately one million Dutch households, according to DONG.

According to the Dutch Government the lower than anticipated price follows "fierce competition" between companies in the public tender to secure the permit and associated subsidy. Overall, there were 38 bids, with Danish offshore wind developer, Dong Energy, submitted the winning bid.

The Minister of Economic Affairs, Henk Kamp, said: "Worldwide it has never happened before that an offshore wind farm can be built at such low cost. The Dutch system in which companies have to compete with each other while the government regulates all conditions for building the wind farm has proved to be very successful. This reduction of cost represents a major breakthrough in the transition to more sustainable energy.”

The Dutch Government expects four additional offshore wind farms to follow in the coming years; located off the coast of the provinces of North and South Holland. With Borssele I and Borssele II the wind farms will have a combined capacity of 3,500 MW, generating enough electricity for more than five million households. This a major contribution to the Netherlands goal of 16 % sustainable energy in 2023.

Minister Kamp continued :"Over the next few years the five largest wind farms in the world will be built in the Netherlands. With the development of offshore wind farms we are building a new economic sector. The development of offshore wind farms has already created around 4,000 jobs in the Netherlands, such as in manufacturing, construction and research. This is expected to grow to 10,000 jobs by 2020."

It is expected that the tender for the Borssele III and Borssele IV will be closed in the last week of September 2016. After that, from 2017 the development of wind farms off the coast of the provinces of South Holland and North Holland is expected to commence.

For more information, please follow the links provided. To view offshore wind projects worldwide on our interactive map, please follow this link.

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DONG grows with Borssele I&II win

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