Dutch Government Explores Subsidies for Offshore Wind Farms
The Hague, Wednesday, 19 February 2025.
The Netherlands is considering reinstating subsidies for offshore wind farms to support green energy and address market challenges, with updates expected in March 2025.
Market Challenges and Government Response
The Dutch Ministry of Climate and Green Growth has initiated research into subsidy measures for offshore wind farms as of February 17, 2025 [1]. This move comes in response to declining developer interest and challenging market conditions that could impact the Netherlands’ green energy goals [1]. Minister Sophie Hermans is expected to present detailed findings to the Dutch Parliament (Tweede Kamer) in March 2025 [1], following a motion adopted in December 2024 that urged the government to explore new support mechanisms [1].
Innovative Financing Model Under Consideration
The Ministry is specifically examining the implementation of a ‘contract for difference’ system, similar to the model successfully employed in the United Kingdom [1]. This approach has proven effective in the UK, where recent data shows significant support for offshore wind development, with £1.9 billion ($2.4 billion) allocated to subsidies last year [2]. Energy expert René Peters from TNO notes that this consideration marks an unprecedented shift in Dutch policy, as the country previously insisted on market parties bearing all risks [1].
Infrastructure Investment and Market Consultation
TenneT, the Dutch power grid operator, is advancing its infrastructure investments for these wind farms. CEO Manon van Beek has emphasized the necessity of government support to cover financial risks [1]. The Ministry is currently engaged in consultations with market participants to enhance the business case for wind farms, with particular urgency given the upcoming tender for North Sea wind farms scheduled for September 2025 [1].
Strategic Timing and Energy Independence
This initiative aligns with broader European efforts to expand renewable energy capacity. VVD Parliament member Silvio Erkens emphasizes that this move is crucial for the Netherlands’ energy independence [1]. The timing is particularly relevant as other European countries demonstrate success with similar support schemes - Denmark, for instance, has achieved significant cost reductions in offshore wind projects [6], providing a potential model for the Dutch approach.