Dutch offshore wind’s subsidy-free era ends

The Netherlands just raised the maximum subsidy budget for two upcoming North Sea wind tenders to €9.456 billion, up from €7.896 billion (RVO, Rijksoverheid). That number is not a rescue cheque. It is a ceiling for future tender rounds, called Gamma-A and Gamma-B, opening in November. Winning bids could come in well below the maximum of roughly €0.117 per kilowatt-hour (RVO), a price above recent wholesale averages and designed to make financing possible again rather than generous. But the direction is unmistakable: the Dutch state is putting public money back into offshore wind because the previous model, where developers built without operating subsidies, stopped working.

Why the old model broke

Two years ago, two consortia won the right to build 4 gigawatts of wind capacity at IJmuiden Ver in the North Sea without state subsidies. That is roughly half the offshore capacity the Netherlands plans to add this decade. Noordzeker (SSE Renewables and APG, investing for the Dutch pension fund ABP) took the Alpha site. Zeevonk (Vattenfall and Copenhagen Infrastructure Partners) took Beta (Blackridge Research, NOS). Both are now hesitating over their final investment decisions, the point at which owners and lenders commit capital irreversibly.

The economics shifted on both sides. Costs rose: Dutch law records that offshore-wind construction costs in 2025 were 40% above 2020 levels, driven by inflation, higher interest rates and tight supply chains (Staatsblad). Revenue expectations fell: weaker industrial electricity demand means developers expect to sell power at lower prices (NOS). Wind farms are capital-heavy. Most of the lifetime cost is paid upfront, so even modest interest-rate increases can turn a viable project into one that banks will not finance (IRENA).

So the Dutch cabinet is doing two things at once: negotiating with ABP and Vattenfall about the stalled Alpha and Beta projects, and reopening subsidies for the next round. The Gamma tenders will use a support mechanism where the state pays developers when electricity prices fall below a set level. If power prices disappoint, taxpayers cover part of the gap.

Denmark and Germany show the same pattern

The Netherlands is not alone. Denmark's earlier offshore-wind auction drew zero bids. Copenhagen redesigned the tender using two-way contracts for difference (CfDs), where the state pays when prices are low but claws money back when they are high. Vattenfall bid and won, with a total support ceiling of DKK 37.6 billion (KEFM, Energistyrelsen). France received European Commission approval for a €63 billion offshore-wind support scheme covering up to 11.1 GW (European Commission, ESG Today). Germany's story is starker. A 2.5 GW offshore tender received no bids at all, and the industry is pressing Berlin to adopt CfDs (IWR). The UK went through the same cycle: its fifth CfD round produced no offshore awards, and only after changing the terms did the sixth round bring developers back (UK Gov AR5, UK Gov AR6).

Who pays for steadier wind

The beneficiaries are developers and their lenders, who get steadier revenue and cheaper financing. The cost lands on taxpayers and electricity users, though the route varies. In Germany, households and businesses already pay an offshore grid surcharge of 0.941 ct/kWh (Netztransparenz), and German offshore grid expansion alone is projected at €153 to €171 billion through 2045, costs that feed directly into those surcharges (Netzentwicklungsplan). In Belgium, Antwerp chemical firms say they face €80 to €100 million in extra transmission tariffs linked to offshore grid investment (Made in).

Dutch industrial users' group VEMW raises a point that applies across borders: subsidising wind producers while ignoring buyers risks moving the problem rather than solving it. Industrial buyers willing to sign long-term purchase contracts are what make lenders comfortable financing these projects in the first place (VEMW). Without that demand, the public cost rises and stays.

Calling subsidy-free wind "free of state support" was always misleading. Grid planning, sea-floor surveys and cable connections were public costs from the start. What has changed is that governments are now also taking revenue risk onto public balance sheets. Europe is not abandoning offshore wind. It is making taxpayers and bill-payers carry more of the price when the market does not deliver.