Hollandse Kust

Permits for Hollandse Kust (Zuid) Wind Farm Sites III and IV (760 MW) have been issued to Vattenfall

On July 10th, 2019, the Minister of Economic Affairs and Climate Policy announced the permits for Hollandse Kust (zuid) Wind Farm Sites III and IV (760 MW) have been issued to Vattenfall. With 76 turbines type Siemens Gamesa 10 MW-193 DD this wind farm will get a total installed capacity of 760 MW according to The Netherlands Enterprise Agency:  RVO.NL

Before the announcement we tried weighing in the results using the YOUWINd model and tried to estimate the reasoning behind the choice of the winning bid.

The YOUWINd analyst team believed that Orsted would have the upper hand entering with an innovative solution but the Swedish rival, Vattenfall had the upper hand at the end. The Swedish wind power giant will now have the opportunity to install 1,5GW of offshore wind power, enjoying the good collaboration of Siemens Gamesa’s new platform,  the Siemens Gamesa 10 MW-193 DD.

But why have Vattenfall been chosen for this site and not Orsted, Witwind, Shell, Eneco or Van Oord? Zero bid means no subsidy, right? How can we differ from the developers?

Below is how we evaluate the reasoning for the winner:

  • The bid was based on the experience of the developers and the overall quality of the material including the risk and risk mitigations.
  • Local content is important.  The choice of vessels and harbours could for instance come into play in taking that decision.
  • There is always a risk that the OSS is not installed on time and that is out of the control of the developers. This uncertainty is a big risk to the project. Supply chain might be depending on special installation years and windows and the developer needs be financially stable to take on bigger risks in a project like this.
  • Overall decision of suppliers plays a big role as well and how they see fit enabling local content in production, construction and operations the following 25 years. If Vattenfall are committed to buying 152 turbines from Siemens Gamesa, the probability is that SG came up with a good plan as well.
  • Installation vessel supplier is Swire Blue ocean which will probably use Pacific Osprey and Pacific Orca for the foundations and wind turbines and Seaway 7 for the Array cables. By signing on a single supplier there must have been good bundle bid benefits.
  • Vattenfall have had the chance over the last year or so in analysing the supply chain having won the first bid of South Holland coast 1+2. Their plan and risk mitigations are therefore much more mature than any other bidder.
  • Zero bid or negative bid? We believe that all developers offered to pay the local fees. IRR will be similar towards the majority of bidders, between 6-7%.

We congratulate Vattenfall in this achievement in The Netherlands and look forward evaluating the profitability of the project.

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