Corona Pandemic with Impact on Dutch Offshore Auction

Bids for the current auction of 700 MW in the North Sea off the Netherlands can still be submitted until the end of the month. However, the circle of bidders will be somewhat smaller this time.

At the beginning of the month Swedish energy supplier Vattenfall announced that they do not want to participate in the upcoming auction. The reason? The current corona pandemic. “There is too much uncertainty right now to make this kind of investment decision”, spokesman Robert Portier told Reuters. “We have seen demand for energy decline, as many stores are closed and industrial production is down, and we don’t know how long this will persist. We also don’t know what the market will look like after all this is over.”

Vattenfall was recently very successful in the booming Netherlands market. The company won the two most recent tenders for offshore wind farms in 2018 and 2019, which were the first to be granted without state subsidies for the energy generated.

German energy supplier EnBW also cancelled its participation lately, as reported by IJGlobal. The company did not give any reasons, but it can be assumed that the current uncertainty will play a role here as well. EnBW, too, already built offshore wind farms in the past without state support, as required in this tender.

A spokesman for the Dutch Ministry of Economic Affairs said in response to press inquiries that the cancellations would not affect the course of the bidding round. "We still expect a sufficient number of wind farm developers to participate in the tender," he said.

On this occasion, world market leader Ørsted felt compelled to emphasise its support for the auction. Martin Neubert, Executive Vice President and CEO of Ørsted Offshore, said: "The Netherlands has ambitious climate targets for both the energy and industrial sectors and is an important market to us. We deliver a strong bid with a high degree of risk mitigation. We commend the Dutch government for holding on to its tender timelines and its renewable energy targets during a time of global uncertainty. We urge governments worldwide to continue the transition from black to green energy at full speed in order to fight climate change and promote sustainable investment in economic growth and job creation."

The offer period for the site in the North Sea ends on 30 April.