LCoE of future Dutch offshore wind farms

The Netherlands has the ambition to have multiple offshore windfarms operational by 2030 to fulfil climate agreements. The future wind farms will be constructed in sites located offshore of the North-Holland coast and north of the Wadden Isles. The ministry of Economic Affairs and Climate Policy of the Netherlands recently gained insight into the Levelized Cost of Energy (LCoE) of different variants for the wind farm sites considered for Hollandse Kust (west), Ten Noorden van de Waddeneilanden  and IJmuiden Ver.

BLIX Consultancy and Pondera Consult provided the study. Sites with varying energy density (in MW per km2) were considered. The LCoE was modelled per individual turbine with yield simulations and a financial model based on recent market prices.

Wikipedia: The levelized cost of electricity (LCOE) is the net present value of the unit-cost of electricity over the lifetime of a generating asset. It is often taken as a proxy for the average price that the generating asset must receive in a market to break even over its lifetime.

The results of this study were discussed by the ministry of Economic Affairs and Climate Policy and the Dutch wind industry. The tender of the first project in this study (Hollandse Kust (west)) is planned in 2020/2021.

Ben de Sonneville, researcher BLIX Consultancy: “We are proud to have contributed to optimizing the wind farm zones of the Dutch offshore wind roadmap 2030. We gained interesting new insights. The results reveal which site alternatives have lowest costs (LCoE) for wind farm development. Also, the study shows which factors (such as site orientation, water depth, wakes) influence the LCoE in each zone and which subareas are most economic for wind farm development.”

Wind in Vietnam: Dutch Opportunities

The opportunities for wind energy in Vietnam are looking very promising. Research by the World Bank estimates a total potential of 500 gigawatt, which is ten times Vietnam’s expected energy capacity in 2020. Areas with some of the best wind resources are located across the country’s long coastline or at sea. At the moment, Vietnam is mostly focused on onshore and nearshore wind energy.

Eric Arends, partner at Pondera Consult, conducted a baseline study earlier this year, on the opportunities for Dutch businesses and investors in Vietnam’s wind energy market. The research concluded that opportunities are plenty, even though the market in Vietnam is relatively in its early stages.

“European and Asian investors from for example South-Korea and China are keeping an eye  on Vietnam, especially because of the favourable wind conditions in the south-eastern part of the country. For offshore wind, not enough information is available on the wind climate and the seabed.”

In anticipation of a multiannual program, which connects Dutch knowledge with Vietnamese opportunities, Pondera Consult attended the Offshore roundtable on 23 November 2018. Eric Arends presented on the possibilities and future of offshore wind energy in Vietnam. He also discussed the opportunities for international, local and regional companies and investors. Eric recommended that the Vietnamese government develop a system for the controlled tender of offshore projects. The Dutch model, which has led to a large and fast reduction of costs, seems to be a good starting point.

“For the next ten years, both Vietnam and the Netherlands will see a period of strong renewable energy growth. Dutch experience in integrating renewables  into the power grid will be of great value to Vietnam.”

-Eric Arends, Pondera Consult

Vietnam’s future

In response to the baseline study from earlier this year, Pondera Consult was also invited to give a presentation on Dutch experiences at the ‘Scientific Conference on Renewable Energy and the Operation of the Electricity System’, organised by the Vietnam Electricity Group (EVN) in collaboration with the Vietnam Electricity Association and ICASA.

Pondera Consult (Eric Arends, left) at the conference

By the end of November 2018, there were 126 planned renewable energy projects in Vietnam, with a total capacity of almost 13 GWp. Only a small share of that capacity so far consists of wind energy. One of the challenges for Vietnam is integrating all that energy into the national power grid.

According to Ngo son Hai, Deputy Director of EVN, Vietnam will experience local overloads because of these new projects. This is due to the non-synchronous nature with which the Vietnamese power grid has been developed. Besides overloads, the quality of the energy grid can be affected (reliability, balance, harmonic distortion, etc.).

These problems will have to be resolved if the share of wind energy in Vietnam is to grow. According to the ministry of Trade and Industry, the goal is to increase the installed wind energy capacity to 6 GW by 2030, which is 2.1% of Vietnam’s total electricity demand.