Dutch offshore wind building slashed in half over funding, market issues

The Dutch government has scaled back its plans for offshore wind power, citing difficult market conditions and limited subsidies, caretaker Climate Minister Sophie Hermans (VVD) said. Instead of the initially planned 2 gigawatts, only 1 gigawatt of new offshore capacity is expected to be built, enough to supply roughly 1 million households.

“The challenging market conditions for offshore wind energy mean that the subsidy available can now only cover half of what was originally planned,” Hermans wrote in a letter to Parliament. The original ambition in the offshore wind action plan was 4 gigawatts, which had already been reduced before this announcement.

Despite the scale-back, Hermans emphasized the government still wants construction to proceed, partly because high-voltage grid operator TenneT is preparing to lay cables that will connect to the future turbines.

The government has increased the subsidy per watt of planned output to make projects viable. The subsidy package still requires approval from the European Commission.

Building offshore wind parks has proven difficult in the Netherlands. Last fall, no company applied to build a wind park on the North Sea without government subsidies. By 2040, the government expects at least 30 gigawatts of offshore wind capacity will be needed to meet the energy demand of decarbonizing industries.

The Ministry of Climate and Green Growth (KGG) has earmarked about 2.5 billion euros for the construction and operation of a new offshore wind park, located roughly 62 kilometers off IJmuiden, with a planned capacity of 1 gigawatt.

Funding includes 900 million euros from the Climate Fund and 1.6 billion euros from the Sustainable Energy Production and Climate Transition incentive scheme (SDE++), which supports companies that generate renewable energy or reduce CO₂ emissions.