A win(d)-win(d) situation

by: Hans van Cleef

The energy market is changing on all fronts. Like every year on Budget Day, this year ABN AMRO will present an extensive report on changes taking place and expected developments in the energy sector. Or rather, the need for the Netherlands and the rest of Europe to transition to clean energy in order to reach the ultimate goal of reducing carbon emissions by 80-95% by 2050. The bank’s report focuses on choices that market participants as well as the Dutch and other governments need to take in order to make the transition a success. Some important choices have, in fact, already been made with regard to wind energy.

As part of its commitment to wind energy, ABN AMRO is holding its second wind seminar on 1 September. That’s good news, as the future belongs to wind power – at least until 2023, the year until which the Dutch government has committed to significantly increasing the share of wind energy in the Netherlands’ energy mix. Now that the tender for the first two rounds of the Borssele wind farm (350 MW each) have taken place, the course has been set for further expansion of Dutch wind energy generation at sea. And although the wind energy policy was already mapped out in the National Energy Accord of 2013, the way in which it is being implemented is very surprising. The targeted cost saving of 40% stated in the National Energy Accord has already been achieved. A round of applause for Henk Kamp, Minister of Economic Affairs, who cut costs by appointing TenneT as the sole manager of the electricity grid at sea. The tender was also won by DONG Energy, a Danish energy producer and supplier, which submitted an exceptionally (and surprisingly) low bid for building the wind farm. This set the tone and promises much for the coming years.

In pursuit of further development and cost savings, during the Netherlands’ presidency of the European Union, the Dutch Economics Minister reached agreement with neighbouring countries on energy activities in the North Sea, mainly regarding the planning and installation of wind turbines. And now that the first final offer has been made, four tenders are set to follow in the coming years. With the increased scale of activities, the trend towards lower prices could continue.

The global climate accord signed by 195 countries in Paris last December reflects the awareness and willingness of these countries to reduce carbon emissions. The climate deal ratification process has already begun. To implement the agreement, a minimum of 55 countries with joint carbon emissions equalling 55% of the total global emissions must endorse the accord and bring it into law. Whether this will succeed will depend largely on the United States and China, who together account for almost 38% of total global carbon emissions. Although the Netherlands is low on the lists of European countries making the energy mix more sustainable and reducing carbon emissions, the country will rise significantly on these lists in the coming years. The targeted production of 3,500 MW of offshore wind in just seven years’ time – bringing the total to 4,500 MW – is a project of unprecedented scale and reflects the Netherlands’ big ambitions. The next few years will be devoted to achieving these objectives, and the Dutch will work together with surrounding countries to further expand wind capacity within the European energy grid. The future belongs to wind power, at any rate until 2023. It is now up to the energy sector, and politicians, to maintain the momentum. After all, it’s a win(d)-win(d) situation.