Richard Heap’s Post

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Are you a quiet quitter or a loud leaver? Whichever is your preferred exit strategy, you can expect to see more of it used by prospective bidders in offshore wind tenders this year. It was part of Norway's 1.5GW Sørlige Nordsjø tender that reached its climax this month, where only two of the five pre-qualified bidders actually bid. EnBW Energie Baden-Württemberg AG's Norseman Wind AS made the headlines as it quit the process loudly, with a couple of others 'quiet quitting' by not making good on their pre-qualified status and actually bidding. The winner was the Parkwind and Ingka Investments joint venture Ventyr. And today, Eneco and Equinor have loudly left the 4GW IJmuiden tender in the Netherlands, with familiar criticisms about the financial risks and the low levels of subsidies on offer. By low, we actually mean 'non-existent' although that isn't putting off firms like Vattenfall, which has today committed to the Dutch process. Even so, drop-outs will continue to be a feature of tender processes in 2024. Some will leave processes loudly as they attempt to influence government policies, while others will sidle away quietly. But the result will be the same: fewer bidders. We can only hope those who do bid have viable projects. So far, we haven't seen this fully de-rail an offshore tender process in 2024, along the lines of the absence of offshore wind in the UK's 2023 Contracts for Difference process. But it's only a matter of time. (NB. Bidding opened in the 2024 vintage of the UK's CfD process this morning) A lot has been made of the volume of offshore wind capacity to be auctioned in Europe this year: over 50GW reportedly. But how much of this will actually be successfully allocated? #offshorewind #tenders #loudleaving #quietquitting

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Raya Peterson

Global Lead - Offshore Wind Advisory at Ramboll | Spreading Offshore Wind Power Around the World 🌎 Since 2009 | Dad of two Boys

5mo

Good post and reflection Richard! I agree. In my opinion we overall need less focus from governments on making money with seabed rights and more focus on mechanisms that ensure that these projects get built! It‘s not helping the businesses case of any of these projects to pay hundreds of millions many years before the first turbine spins and the first kWh is ever produced. Sustainability criteria and system thinking can create for example creat win win situations, were local suppliers are at an advantage. But this requires some bold rethinking and needs to be implemented diligently. In the past the Dutch market was really a role model in this respect. Now we unfortunately also there see this increased focus on „willingness to pay“ and less on the qualitative criteria. Policy makers need to adress this or all the nice ambitious offshore wind targets are at risk.

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