Government pilot project overtaken -- Start date for Dutch North Sea commercial venture

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Construction of the Netherlands' first true offshore wind power station, the Q7WP project, is set to start in April 2003. Plans for the 120 MW of Vestas 2 MW turbines were approved in mid-February, says Mathieu Kortenoever of energy consultancy E-Connection. The commercial project, being developed by a consortium comprising E-Connection, Vestas, Smit Maritime Contractors, ABB and Fortis Bank, is now likely to come on-line before the government's much delayed offshore demonstration plant.

Ironically, the subsidised Near Shore Windpark (NSW) -- intended to pave the way for commercial development of truly offshore wind farms -- is planned for a site no more than ten kilometres off the coast, while the Q7WP project is to be sited some 23 kilometres from land in "sector Q7." While it steams ahead, the NSW has not got past the stage of issuing tenders for the right to apply for development permits. These are due to be decided next month.

The permits granted for Q7WP are subject to a six week appeal period from their date of issue last month. With only one serious objection registered during the draft permit consultation period -- from a member of the Seas at Risk environmental group -- Kortenoever is confident the project will survive this final trial. "The next stage is financial closure," he says. "Obviously this will only be possible once we have an irrevocable permit. But now at least we have clarity about the conditions attached to the permit and the financial consequences of those conditions." Financing is not a problem, he adds. "Fortis is arranging and syndicating equity and debt financing. We've also reached an agreement on insurance but, again, we will close that discussion only after we know the final form of the permit."

Commercial pioneer

Here the pioneering project looks to have avoided a potentially damaging public/private conflict. Although a fully commercial venture -- whereas the NSW will receive some EUR 27 million subsidies -- Q7WP is still expected to provide research data. Whereas the original permit included a demand for a non-specified monitoring and evaluation program, with a potential price tag of EUR 9 million, the final version calls only for a monitoring and evaluation program covering the project's environmental impact, estimated at EUR 4.5 million. "It's still a lot of money, but I think we can live with it," says Kortenoever. "For total project costs we are looking at more than EUR 200 million." The NSW has been costed variously at EUR 170 to EUR 260 million.

Finance no problem

In principle, offshore finance should not be a problem, believes Kortenoever. He dismisses claims that the recent withdrawal of Dutch utilities Essent and Eneco from the offshore scene revealed a fundamental uncertainty about the long term stability of green kilowatt hour pricing. "The political dimension of green power pricing has always been a factor, that's nothing new," he says.

Projected production from Q7WP is 350 million kWh a year. "We have got a customer, but they don't want their identity to be known at present -- but the power will be delivered to the Dutch grid and I assume it will be sold on the Dutch market," says Kortenoever.

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