Setback for the cabinet: Eneco withdraws from the construction of the largest wind farm in the North Sea

Energy company Eneco is withdrawing from the tender for the construction of the largest Dutch wind farm in the North Sea. According to the group, there are “structural flaws” in the most recent tender for two parks near IJmuiden, and the market conditions for offshore wind energy have deteriorated.

This concerns two wind farm plots, both of which should have a capacity of 2 gigawatts, which would enable them to supply around four million households with electricity. The government wants to generate more than 20 gigawatts of wind energy at sea by around 2030. The wind farms near IJmuiden should be ready to supply energy by 2029. The risks of investment have now become too great, according to Eneco, which partnered with Norwegian energy company Equinor in the tender. Due to high steel and copper prices, supplier shortages and increased interest rates, the sector is experiencing an overall increase in costs in the supply chain.

Eneco also criticizes the extent to which the ‘financial component’ has become more important in the tender. Previously, it was not the highest bidder, but the party with the best quality bid that usually received the award, such as in the areas of ecology, innovation and system greening. Now the government is said to have “shifted the emphasis”, including by awarding the tender to parties that make a high bid. An undesirable development, says Eneco. “If the financial component becomes even larger, the tenders will look much more like an auction. These additional costs must ultimately be recouped through the energy bill.”

The Ministry of Economic Affairs and Climate understands that interest is decreasing due to rising costs, says a spokesperson. The ministry expects that fewer parties will present themselves compared to previous times. However, Economic Affairs disagrees with the point that it is “less about quality”. The choice for the tender is made via a points system, now 85 percent based on quality requirements. It is true that the financial component in that system has grown.

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