A new Dutch study reveals that offshore wind will not be profitable in all cases in 2030.
Using several scenarios, Netherlands Organization for Applied Scientific Research (TNO) investigated the feasibility of offshore wind energy in 203 in its whitepaper, “Offshore wind business feasibility in a flexible and electrified Dutch energy market by 2030”.
Using models, two scenarios for the Dutch electricity system and their economic risks were developed.
TNO mapped out the economic risks based on two scenarios.
In one scenario, the researchers assumed low electrification in 2030 based on the Klimaat- en Energieverkenning 2021 (‘Climate and Energy Exploration 2021′) and the Climate Agreement.
This scenario does not have a tangible goal for industrial electrification on the demand side; on the supply side, the entire planned 21.5GW of offshore wind energy is utilised.
The study reveals that offshore wind energy will not be profitable in 2030 under these conditions.
The surplus supply in the energy market will, even after taking export into account, result in a 13% curtailment of offshore wind energy production, meaning the total capacity of wind energy will not be used entirely.
TNO calculated that the business case will only be positive 30% of the time for providers of offshore wind energy.
In the second scenario, TNO assumed the implementation of proposed European policies (the Renewable Energy Directive II (RED II) and the Fit for 55 package), which set out clear goals for industrial electrification.
Offshore wind appears to be profitable in this high-electrification scenario. In this scenario, the entire production capacity will be utilised.
The market price will be financially attractive for the business case 80% of the time.
Gas will remain needed at times of increased demand while no renewable sources are available.