Uncertainty in rules and regulations surrounding electricity market privatisation and doubts about the long-term stability of the all important national ecotax legislation are the principal reasons cited by the utilities for their decision. The tax effectively levels the power market playing field for sales of wind generated electricity.
Despite this series of apparently crippling desertions and the uncertainty surrounding the NSWP's preferred turbine manufacturer, crisis hit Enron, Rene van der Borch of consultancy Profin is adamant that the consortium remains in the running on the strength of its other members: electronics and engineering giant Siemens, construction concern Heijmans, and offshore specialists and dredgers Van Oord AZC.
"I'm convinced that of all the consortia we are the best prepared in terms of engineering, the demonstration function, and the environmental aspects. I'm absolutely certain that we can win the contract." The Nearshore Wind Farm, to be built some eight kilometres from the Dutch coast level with the town of Egmond aan Zee, is intended to provide data for further offshore development outside the Dutch 12 mile zone. It is eligible for government subsidies of EUR 27.2 million. The successful consortium will still have to obtain the necessary building and environmental permits.
State of uncertainty
"Naturally we are looking for other replacement partners," continues Van der Borch. "But there are two problems: the project has to fall within your risk profile and, at the moment, the Dutch power companies with the liberalisation of the power market are in a state of great uncertainty -- Eneco has just lost its municipal contract to Remu, for example."
The future of the green power market gives particular cause for concern. "The EU Commission has only given a guideline. There is no framework for a definitive policy. As long as there is an element of uncertainty in the construction of the green power price, it becomes very difficult to finance such an enormous project -- the risks are unacceptable," says Van der Borch.
"At the moment, in the Netherlands, only the consumer market is likely to see growth in demand for green power, the business sector is going to concentrate on emissions trading. Insurance is also a problem -- we have an agreement with a consortium of insurers, but the own risk element remains enormous."
For Van der Borch, these are all issues which need to be dealt with by the government in the course of this project. "It's not just a question of understanding more about the technical and environmental aspects of offshore development," he says. "The Near Shore Windpark will teach us lots about the financial and economic dimensions of offshore wind energy development."
Nuon, which as part of the competing Noordzeewind consortium is the only Dutch power company left in the tendering process, remains firm in its commitment. The company's Peter Knoers, however, understands the doubts held by Essent and Eneco. "When we first considered participation we also had a lot of questions. There are a lot of points that need clarification," he adds. "For example, the government wants the project to be completed by 2003, but many of the necessary procedures are not in place. We've made our tender conditional on the government sorting out these issues. Other than that however, we are convinced the project is technically and financially viable."
Nuon is joined in the Noordzeewind consortium by Shell, which also partnered Nuon in development of the UK's first offshore wind plant at Blyth. ING bank will provide finance and Ballast Nedam is charged with construction. The consortium plans to use the NEG Micon 2.8 MW turbine, when this machine appears on the market.
Two newcomers, huge German power company E.on and Belgium's main utility Electrabel, have also submitted tenders for the project. Electrabel will work with Vestas, Belgian offshore dredgers Jan de Nul and Belgian installation concern Fabricom. E.on will work with construction concern HBG, Tebodin and green energy agency Ecofys and will be advised by Dutch bank ABN Amro.
A government decision on the winning bidder is due before April 11. With the government keen to minimise the visibility of the project, one of the main criteria likely to influence the selection commission, chaired by Hans Alders, will be distance from the shore. Electrabel looks strong with plans for a project 15 kilometres out, NSWP wants a site at 11 kilometres, E.on and Noordzeewind are both planning for a site ten kilometres from the coast.