North Sea Wind: How the Dutch Zero-Subsidy Offshore Auction Model Rose and Stalled

The Dutch offshore wind programme is the clearest example in Europe of an auction design that succeeded so well that it stopped working. By letting developers bid for the right to build without subsidy, and then for the privilege of paying the state, the Netherlands drove costs down faster than any other North Sea country and attracted Ørsted, Vattenfall, Shell, Eneco, RWE and the largest Dutch pension funds. The design assumed that electricity prices, industrial demand and supply-chain costs would keep moving in the developers’ favour. From 2022 they did not. This article traces the rise of the zero-subsidy model, the 4 GW IJmuiden Ver award that marked its high point, the 2025 collapse in bidder interest and the return of subsidies in 2026, and asks what the episode means for the companies that build, finance and depend on North Sea wind. It is part of the Netherlands Company Stories hub.

How did the Netherlands build the zero-subsidy auction model?

The Dutch model rested on a division of labour in which the state took the development risk and the developer took the construction and market risk, and it was created after the first generation of Dutch offshore projects proved expensive and slow. Egmond aan Zee (108 MW, 2007), Prinses Amalia (120 MW, 2008) and Luchterduinen (129 MW, 2015) were developer-led projects with individual subsidies. The 2013 Energy Agreement set a target of 4.5 GW by 2023 and the government, through the Netherlands Enterprise Agency RVO, took over site selection, environmental assessment, geotechnical surveys and permitting, with TenneT designated as the offshore grid operator.

The first tender under the new regime, Borssele I and II in July 2016, was won by Ørsted (then DONG Energy) at €72.70/MWh, far below the previous European benchmarks. Five months later Borssele III and IV went to the Blauwwind consortium of Shell, Eneco, Van Oord and Mitsubishi at €54.50/MWh. In 2017 the ministry amended the rules to allow zero-subsidy bids, and in March 2018 Vattenfall won Hollandse Kust Zuid I and II with no subsidy at all, the first such award in Europe. Vattenfall repeated the feat for Hollandse Kust Zuid III and IV in 2019, CrossWind (Shell and Eneco) won Hollandse Kust Noord in 2020, and in December 2022 Ecowende (Shell, Eneco and later Chubu) and Oranjewind (RWE) won the two Hollandse Kust West sites with bids that included system-integration and ecology commitments.

The model worked because it stripped the developer’s cost stack to turbines, foundations, cables within the park and operations. The grid connection, a large share of total project cost, was built by TenneT and recovered through regulated tariffs across all electricity users, and the state’s surveys removed years of early-stage risk. Combined with falling turbine prices, cheap debt and a Dutch wholesale market that was expected to tighten as coal and gas plants closed, zero-subsidy bids were a reasonable bet on power prices in the 2020s.

What did the 4 GW IJmuiden Ver award of 2024 represent?

The IJmuiden Ver Alpha and Beta tenders, decided on 11 June 2024, were the largest offshore wind award in Dutch history and the peak of the comparative-assessment model, with both winners agreeing to pay the state for a 40-year permit and to deliver ecological and system-integration commitments beyond the turbines. The Alpha site, judged on nature protection, went to Noordzeker, a consortium of the pension funds ABP and APG with SSE Renewables; it will pay more than €1 million a year and committed to bird-friendly turbine designs, reduced disturbance of marine mammals and artificial reefs at three-quarters of its turbines. The Beta site, judged on system integration, went to Zeevonk II, a joint venture of Vattenfall and Copenhagen Infrastructure Partners, which offered €20 million a year plus a 1 GW electrolyser at the Maasvlakte and a 50 MW floating solar farm.

Each 2 GW park was due online in 2029, connected through TenneT’s new 2 GW high-voltage direct-current platforms. Both winners paid €20 million for the site studies, and the state had, in effect, created an asset class in which developers paid for permits rather than receiving subsidies. S&P Global described the award as happening amid complicated market conditions, and the number of bidders was already lower than in the 2018–2022 rounds.

Within fourteen months the Beta project was renegotiated. In August 2025 the ministry agreed that Zeevonk would be built in two phases, 1 GW by 2029 and 1 GW by 2032, because the Delta Rhine Corridor hydrogen pipeline that was to carry the electrolyser’s output had been delayed to the early 2030s. The minimum electrolyser obligation fell to 500 MW, the floating solar requirement was cut to 6 MW with a possible scale-up to 50 MW, and Zeevonk’s total payments to the state fell to about €400 million, with nothing payable for several years after the first two. Then-minister Sophie Hermans said that without the changes Zeevonk would likely not have been able to build the park at all. TenneT’s extra costs from the delay are passed through to network tariffs.

Why did developers stop bidding in 2025?

Developers stopped bidding because the arithmetic that justified zero-subsidy awards reversed between 2022 and 2025: capital costs for turbines, foundations and vessels rose with inflation and supply-chain shortages, interest rates increased the cost of project debt, and the industrial electrification that was supposed to absorb the output arrived later and smaller than the roadmap assumed. Long-term power purchase agreements became harder to sign because the chemical and steel companies that would have been the natural offtakers were themselves cutting back, a problem the Rotterdam hydrogen hub article describes in detail.

The government saw it coming. On 19 May 2025 it shelved the two tenders planned for that year, IJmuiden Ver Gamma and Nederwiek I, totalling 2 GW, because market consultation showed little interest, and announced a single 1 GW site instead. On 16 July 2025 Hermans cut the 2040 target from 50 GW to 30–40 GW, citing rising costs and slower electrification, while keeping the 21 GW target for 2032, which had itself been moved from 2030 the previous year. The sector association NedZero urged the government to safeguard the 21 GW roadmap.

The single tender that went ahead, Nederwiek I-A, opened on 16 October 2025 and closed on 30 October with no applications. RVO had already adjusted the assessment criteria to market conditions, but no developer was willing to take the site on the terms offered. Hermans called the result a sign that the market had shifted and said government support was crucial to prevent development from stalling. Similar failures or postponements had occurred in Germany, Denmark, the UK and Belgium, which made the Dutch outcome less of a national embarrassment than it would have been two years earlier.

How is the Netherlands bringing subsidies back?

The state is returning to a subsidised model through a temporary support scheme for offshore wind, known by its Dutch acronym TOWOZ, under which the IJmuiden Ver Gamma-A and Gamma-B sites will be tendered with a maximum price and a budget reservation of about €6.2 billion, while permanent legislation for two-sided Contracts for Difference is prepared. The first step, announced on 16 January 2026, was a single 1 GW tender for Gamma-A with up to €2.5 billion of support, €900 million from the Climate Fund and €1.6 billion from the SDE++ scheme, at a maximum of €104/MWh. The Netherlands Environmental Assessment Agency had advised offering only one site because subsidy funds were limited.

Parliament pushed back. A motion passed in early March 2026 called for a second 2026 tender, and on 7 April 2026 the new climate minister Stientje van Veldhoven confirmed that Gamma-B would be added, creating a 2 GW round with the tender moved from September to November to give bidders time. On 15 June 2026 the cabinet raised the ceilings to €117/MWh for Gamma-A and €116/MWh for Gamma-B, citing investment uncertainty and the possibility of new grid feed-in charges being considered by the regulator ACM, and said market consultation showed sufficient interest in both sites. The tender opens on 26 November and closes on 10 December 2026, with winners expected in the first quarter of 2027 and commissioning around 2032.

Other measures include extending the indirect cost compensation scheme for energy-intensive industry to 2028, a PPA guarantee fund with Invest-NL to make offtake contracts bankable, and a five-year pause on offshore hydrogen demonstration projects decided in September 2025. The May 2026 letter to parliament on the Development Framework kept all other tender and delivery dates unchanged pending a full roadmap update expected at the end of 2026, and confirmed that Gamma-A and Gamma-B will share a single TenneT grid connection.

Which companies dominate Dutch offshore wind today?

The operational Dutch fleet of about 4.7 GW is dominated by Ørsted, Vattenfall, Shell and Eneco, while the 5.5 GW under construction and the 13.5 GW planned bring in RWE, SSE, Copenhagen Infrastructure Partners and the pension-fund vehicles of ABP and APG. Ørsted owns Borssele I and II (752 MW), the largest Dutch park when it was completed in 2020. Vattenfall operates Hollandse Kust Zuid (about 1.5 GW across four sites), the largest subsidy-free park in the world at commissioning, and is a partner in Zeevonk. Blauwwind’s Borssele III and IV (731.5 MW) is owned by Shell, Eneco, Partners Group and Mitsubishi affiliates.

Eneco, owned by Mitsubishi Corporation and Chubu Electric since 2020, is the most consistent Dutch presence: it is in Blauwwind, CrossWind (Hollandse Kust Noord, 759 MW, producing since December 2023) and Ecowende (Hollandse Kust West VI, 760 MW), which delivered first power on 6 July 2026 with 52 Vestas 15 MW turbines, seven of them fitted with a single red-painted blade to test bird-collision reduction, and expects full commercial operation before the end of 2026. RWE’s Oranjewind (Hollandse Kust West VII, 795 MW) is the other park under construction. Shell, by contrast, has made no new Dutch offshore wind commitment since 2022 and has been reported by Bloomberg to be preparing to sell offshore wind stakes worth around $1 billion in 2027, part of the retreat described in the Shell headquarters story.

The supply chain is also Dutch to a remarkable degree. Van Oord and Boskalis install foundations and cables worldwide, Sif in Rotterdam makes monopiles, and Vopak and the Port of Rotterdam provide the logistics base. The Boskalis and Van Oord story covers how the dredging companies turned offshore wind into a second core business.

How does the grid bottleneck constrain the roadmap?

Every Dutch offshore wind farm depends on a TenneT connection, and the 2 GW HVDC platform programme that will link IJmuiden Ver, Nederwiek and Doordewind to shore has slipped after the termination of the Petrofac contract, which pushed a large part of TenneT’s offshore investment from 2026 into 2027. Onshore, the landing points at Maasvlakte, Borssele and Eemshaven feed into a high-voltage grid that is already congested; the TenneT grid congestion story describes how a connection stop came into force around Utrecht in July 2026.

The roadmap has adjusted. The May 2026 letter confirmed that a direct connection from the Ten Noorden van de Waddeneilanden zone to Eemshaven is no longer being pursued because no workable electrical route was found, leaving that zone as a candidate for a future hydrogen demonstration rather than an electricity park. Doordewind Site II has been definitively added to the development framework. TenneT has been asked to consider extending the lifespan of the Borssele, Hollandse Kust Zuid and Hollandse Kust Noord grids to 37 years, which would let the first generation of parks be repowered without new cables.

The deeper issue is that offshore wind produces electricity where the demand is not. The roadmap’s original logic was that Rotterdam’s refineries and chemical plants, Zeeland’s industry and the Eemshaven cluster would electrify and convert surplus power to hydrogen. With Shell’s Holland Hydrogen 1 only now starting, BP out of its Rotterdam electrolyser and Uniper’s plant unbuilt, the system-integration commitments that won the IJmuiden Ver tenders have become liabilities, which is why Zeevonk’s were renegotiated. Grid feed-in charges for generators, now under consideration by the ACM, would add a further cost that the June 2026 ceiling increase explicitly anticipates.

What does the 2040 target cut mean for Dutch energy strategy?

Cutting the 2040 ambition from 50 GW to 30–40 GW was an admission that the Netherlands cannot build offshore wind faster than its industry can consume the power or its grid can carry it, and it aligns the roadmap with a more cautious view of electrification that is shared across north-west Europe. The 21 GW target for 2032 remains, which still requires adding about 16 GW in six years from a base of 4.7 GW operational and 5.5 GW under construction, a pace the country has never achieved.

The planning figures in the May 2026 roadmap show about 23.5 GW across operational, under-construction and planned parks: Borssele, Hollandse Kust Zuid, Noord and West, IJmuiden Ver’s four sites, the 6 GW Nederwiek zone, the 700 MW Ten Noorden van de Waddeneilanden zone and the 4 GW Doordewind zone. Of these only Gamma-A and Gamma-B have a tender date. Nederwiek I-A, which was meant to be operational by 2030, will have to be re-tendered, and NedZero’s chairman Jan Vos has argued that rising energy prices in 2026 justify doubling the pace rather than slowing it.

Fiscally, the return of subsidies changes the character of the programme. From 2016 to 2024 offshore wind cost the state the grid connection and the surveys and, at IJmuiden Ver, actually generated permit income. The Gamma round reserves about €6.2 billion of public money for 2 GW, although the government expects competition to push winning bids below the ceiling and the final cost to depend on market prices over the support period. A two-sided CfD, under which developers repay the state when prices exceed the strike, is the mechanism being prepared to limit that exposure, and the UK, Germany and Denmark are moving in the same direction. Readers who want the British comparison will find it in the UK Company Stories hub.

What can founders and investors learn from the Dutch auction model?

The first lesson is that de-risking by the state is the real subsidy. The Dutch model’s success in 2016–2022 came less from developers’ ingenuity than from RVO doing the surveys, TenneT building the connection and the permit arriving pre-approved. Entrepreneurs in any infrastructure-heavy sector should look for the jurisdictions that absorb early-stage risk, because that, more than a cash subsidy, determines whether a project is financeable.

Second, auctions discover prices, not costs. Zero-subsidy bids reflected what developers believed about 2030 power prices and 2025 turbine costs; when both assumptions moved, the bids stopped. Investors should treat a run of ever-lower auction results as evidence of optimism as much as of efficiency, and should ask what the bidders would need to be true for the price to hold.

Third, non-price criteria create hidden dependencies. The Dutch comparative tenders rewarded ecology and system integration, which produced genuinely innovative commitments but also tied projects to pipelines, electrolysers and offtakers outside the developers’ control. When the Delta Rhine Corridor slipped, so did Zeevonk. Any obligation that depends on someone else’s infrastructure should be priced as a contingent liability.

Fourth, policy reversals are survivable if they are fast and transparent. The Netherlands went from a failed zero-bid tender in October 2025 to a funded 2 GW round with raised ceilings by June 2026, with parliament pushing the government to go further. For developers, that responsiveness is itself a reason to stay in the Dutch market. For a view of how Dutch pension capital is being deployed into these assets, see the pension reform story, and for the engineering firms that benefit regardless of who wins, the Arcadis and Fugro story.

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