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Comment: Offshore wind's new benchmark

WORLDWIDE: Jatin Sharma of insurance underwriters GCube gave a fascinating presentation at last year's RenewableUK offshore wind conference.

Client confidentiality prevented him from naming the guilty parties, but he pulled no punches in highlighting some of the less-than-entirely-wise practices and procedures that had sent offshore developers running to their insurers in recent years. "You see, we know all your dirty secrets," he told delegates.

Near the end of his presentation, in an almost throwaway remark, Sharma said that if you were looking for an example of how to get offshore development right, look no further than the Netherlands. That came as something of a surprise to an audience accustomed to the UK and Germany as leaders of offshore wind. But it makes a lot more sense now that the Dutch have rewritten the rulebook on offshore wind strike prices.

Dong Energy's winning bid of a 15-year strike price of just €72.70/MWh for the twin 350MW Borssele 1 and 2 projects comes with a couple of caveats. The price doesn't include connection costs, and the Dutch government played a big part in cutting developers' costs by preparing the site data and carrying out the environmental impact assessment.

But even given those provisos, the strike price massively undercuts the previous record low bid - Vattenfall's €103.1/MWh for Denmark's 400MW Horns Rev 3 project, which also excluded transmission costs. For several years the industry has been aiming at getting below €100/MWh by 2020. That target has suddenly become redundant.

How this will affect the bidding prices for future auctions in other European countries, particularly the UK and Germany, will be fascinating. There can be no question, though, that Dong has established a new benchmark that other developers will need to react to if they are to stay in the game.

Trumping Brexit

Political pundits don't always agree, but there have been few dissenters this year over two issues. First, that the UK would not vote to leave the European Union in its referendum; and second, that Donald Trump had no chance whatsoever of becoming President of the United States.

The UK government was so confident of the Remain vote winning that it failed to make any contingency plans for an Exit vote.

Whether anyone in the US, including the man himself, have a contingency plan for Trump's occupation of the White House, is less than clear.

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