Shell, Eneco awarded 760 MW Dutch offshore wind concession

Shell and Eneco have won the competition to build the 760 MW Hollandse Kust West VI (HKW VI) offshore wind farm in Dutch waters, the companies said late Dec. 15.

The subsidy-free project some 53 km off the coast from IJmuiden is due to be operational in 2026.

"Through this project we can profitably accelerate the large-scale roll-out of offshore wind in the Netherlands and beyond," according to Shell's head of Gas, Renewables and Energy Solutions, Wael Sawan.

The partners have already taken a final investment decision to proceed with the wind farm, to be delivered via the Ecowende joint venture.

Reef for biodiversity

Biodiversity was a key selection criteria for HKW VI.

Ecowende said it aimed to set a new ecological benchmark for the development and construction of wind farms in the North Sea with a net positive impact on nature.

The design of the wind farm increases space between turbines to create a corridor for birds, uses innovative foundation techniques reducing impacts on marine life and places natural reef structures on the seabed to boost biodiversity, the developers said.

The similar HKW VII concession was awarded based on energy system integration criteria with the concession awarded to RWE.

Its bid included a 600 MW electrolyzer to produce hydrogen as well as 225 MW e-boiler for district heating and industrial applications to help integrate offshore wind into the energy system.

Third success for Shell

Shell and Eneco also won last year's tender for the 760 MW Hollandse Kust West to come online in 2023 generating some 3.3 TWh/year.

A consortium involving Shell is operating the Borssele 3,4 offshore wind farm since 2021, the last project awarded with direct subsidies securing a Eur54.50/MWh support contract in 2017.

Since 2018 all Dutch offshore tenders were awarded without subsidies, but include the onshore grid connection provided by grid operator Tennet.

The Netherlands target 21 GW installed capacity by 2030 with 2.5 GW currently in operation.

The world's biggest subsidy-free wind farm, the 1.5 GW HKZ, is to come online in 2023 with another 2.3 GW now awarded.

PPA pricing platform Pexapark quotes a 10-year PPA index for European offshore wind at Eur106.31/MWh, while a cross-technology-weighed country index for the Netherlands was pegged at Eur85.97/MWh.

S&P Global Commodity Insights forecasts offshore wind capture prices to drop sharply from current highs with the 2030 average falling below Eur50/MWh for Germany as the closest proxy mainly due to gas prices normalizing and so-called cannibalization risk from rising renewables capacity only partly offset by new demand application such as green hydrogen.

German offshore wind capture prices averaged above Eur200/MWh in the first eleven months 2022 with daily values in a range of Eur30.36/MWh on Feb. 19 to Eur702.49/MWh on Aug. 26, according to S&P Global data tracking hourly generation and prices on a daily basis.

Dutch power for 2026 meanwhile settled Nov. 10 at Eur125.92/MWh, EEX data show.

DUTCH OFFSHORE WIND TENDER RESULTS

Source: RVO, developers, S&P Global Commodity Insights