In this public webinar, we will dive into the following risks for players interested in the Dutch market:
- Increased policy ambitions (e.g. additinal 10 GW offshore wind build-out by 2030)
- Commodity price risks
- Weather year risk on price cannibalisation of renewables (what does this do to capture prices of renewables?)
We will explore such questions as: What effect would the Dutch government’s proposed additional 10 GW of offshore wind buildout by 2030 have on renewables’ finances? How big is the risk for subsidised onshore wind and solar projects that electricity prices drop below the subsidy floor? And how can these risks be mitigated?
The costs of renewables have been falling rapidly over recent years. Since Hollandse Kust Zuid I-II became the first subsidy-free offshore wind park scheduled to be built worldwide, all Dutch offshore wind parks have bid in at zero subsidy. While PV solar and onshore wind still receive subsidies in the Netherlands, these are expected to be phased out by 2025 at the latest. And even for subsidised projects, electricity prices cannot completely be ignored, as the Dutch subsidy mechanism only subsidises for 15 years and the SDE++ contains a subsidy floor.
In the current world with electricity prices over 100 €/MWh, the prospect of merchant renewables might not seem so risky. However, the underlying drivers are not long-term in nature. Meanwhile, the Netherlands is moving from an electricity system with a 18% share of renewables in 2019 to about 70% in 2030. On top of this, the Dutch government is currently considering adding 10 GW extra offshore wind by 2030, almost doubling the current target, leading to further cannibalisation risk of merchant renewables.
In this fast-changing context of ambitious decarbonisation targets, volatile commodity prices, and renewables’ increasing exposure to market risk, it is crucial to understand and quantify the various risk dimensions facing developers, operators, and financers of renewables assets.
Watch the recording and see the presentation of our recent public webinar using the link below.