Danish developer Orsted has confirmed it will submit a bid in the 760MW Hollandse Kust North zero-subsidy tender in the Netherlands, shrugging off fears of merchant risk from power prices undermined by the impact of the coronavirus.

“We have decided to hand in a bid tomorrow in the Dutch auction, so there in a way, we are taking more merchant risk, if we should win the project,” chief financial officer Marianne Wiinholt said at a conference call on Q1 earnings.

“Normally, we will do all to mitigate that merchant risk, through hedging and long-term corporate PPAs, like the one we have just signed with Nestlé in UK.”

The Netherlands had decided to press ahead with its latest offshore wind auction round, which closes tomorrow, despite declines in power prices in the wake of lower demand due to the Covid-19 lockdown and economic crisis.

Vattenfall, another heavyweight in offshore wind that already had won zero subsidy tenders in the Netherlands, had taken a cautious approach and said it would not bid in the auction.

The country is an important market for Orsted, the company’s chief executive for offshore, Martin Neubert, said in a statement. “We deliver a strong bid with a high degree of risk mitigation. We commend the Dutch government for holding on to its tender timelines and its renewable energy targets during a time of global uncertainty.

“We urge governments worldwide to continue the transition from black to green energy at full speed in order to fight climate change and promote sustainable investment in economic growth and job creation,” said Neubert.

The Dane said its bid includes innovative technologies that will help integrate ever larger amounts of offshore wind into the Dutch grid, and Orsted’s board of directors already has approved the final investment decision for the project.

The company is currently completing its Borssele 1&2 array off the Netherlands, which just fed first power into the Dutch grid, and will eventually generate enough energy to power 1 million Dutch households.

Wind

Orsted shrugs off merchant risk in Dutch zero-subsidy offshore wind auction bid