The Netherlands – An offshore wind auction for the Hollandse Kust West site is about to come to a close.
Two areas totaling 1.5 GW are up for auction. The auction uses many non-price criteria. It’s the most advanced use of non-price criteria in a wind energy auction to date. Criteria emphasize ecology and system integration.
The two auction sites use different criteria. Bidders for “site VI” must consider the project’s impact on the North Sea ecosystem. This accounts for 50% of the score. The criteria cover the project’s impact on birds and marine habitats. Bids that include knowledge sharing and more R&I will also score higher.
Also, “Site VII” looks at how well the wind farm will fit into the Dutch energy system. Again, 50% of the score is based on this. The criteria include investments in system integration and knowledge sharing, such as energy storage or the use of HVDC cables. 60 months after the permit is issued, at least one prototype pilot should be operational.
Non-price criteria in wind farm auctions help recognize and reward wind energy’s added value. Until recently, offshore wind farm developers bidding in auctions focused solely on lowering their costs (of the electricity they generate).
The new State Aid Guidelines for Energy from the European Commission allow non-price criteria to account for up to 30% of scoring in CfD auctions. Also, in their latest offshore wind auction, for a 1 GW wind farm off Normandy, France used non-price criteria for 25% of the scoring. An auction for new offshore wind farms in Germany will use four non-price criteria. And Belgium is consulting on many criteria.
In addition to protecting biodiversity, these criteria will ensure the smooth operation of the wider energy system. They will recoup wind industry investments in these areas, including technology development.
Non-price criteria must meet certain standards. Ils doivent être clairs, comparables, measurables et evaluable They should not add to administrative or management costs. Building on the industry’s strengths and encouraging further innovation. And they should be comparable to other auction criteria.
The Dutch government will not fund the Hollandse Kust West project. Ten percent of the scoring is based on how far bidders are willing to pay the authorities up to €50m. In practice, this is negative bidding: developers pay the government to develop the project. At least 50% of the scoring is on non-price criteria.