Rising Costs Halt New Wind Farm Applications in the North Sea
The Hague, Friday, 31 October 2025.
No applications were submitted for a new wind farm at the Nederwiek I-A site due to increased costs and lower electricity demand, highlighting economic challenges in renewable energy.
Economic Pressures on Renewable Energy
The Netherlands is facing significant challenges in expanding its offshore wind energy capacity, as evidenced by the lack of applications for the Nederwiek I-A wind farm site in the North Sea. This situation stems from rising costs and a lower-than-anticipated demand for electricity, which have put substantial pressure on wind energy development [1]. The Ministry of Climate Policy and Green Growth (KGG) anticipated this outcome and is preparing for future tender rounds with revised measures to attract interest from developers [2].
Insights into the Offshore Wind Market
The offshore wind market has evolved rapidly over recent years, with the capability to build wind farms without subsidies becoming feasible since 2018. However, the landscape has shifted dramatically, with increased costs for wind farm developers and slower-than-expected industrial decarbonization affecting long-term electricity purchase agreements [3]. This trend is not isolated to the Netherlands; similar challenges are reported in Germany, Denmark, the United Kingdom, and Belgium, where applications for new wind farm projects have also stalled [4].
Government’s Strategic Response
To mitigate the risk of stagnation in wind farm development, the Dutch government announced an Offshore Wind Energy Action Plan on September 16, 2025. This plan includes financial support measures and aims to stimulate demand for offshore wind energy [1]. The government has earmarked €948 million from the Climate Fund for a 2026 tender round, targeting 2 gigawatts of new offshore wind capacity, with specifics to be announced by January 2026 [2].
Looking Ahead to Future Developments
The action plan introduces a novel financial support model, ensuring a minimum price for generated electricity to encourage investment. This model is designed to compensate for low market prices, with the government covering the difference, while allowing the government to benefit from high electricity prices [2]. By implementing these steps, the Netherlands aims to enhance its energy independence, improve industrial competitiveness, and reduce CO₂ emissions, thereby reinforcing its commitment to a sustainable energy future [1].