How does awarding a permit for an offshore wind farm work?

What is a tender?

Companies can apply for a permit to build and operate an offshore wind farm at a specified site. For this, RVO draws up a so-called 'request for tenders'. In this procedure, we assess all applications submitted during the period the tender is open. The winner awarded the permit is the company/party that receives the most points for its application in a ranking system.

The tender process for offshore wind energy can be divided into 7 phases. Read what happens in each phase below.

Phase 1: Evaluation

In The Netherlands, we already have experience with issuing permits for construction and operation of offshore wind farms. However, every tender round for awarding these permits provides new insights. That is why we start every new tender process with an evaluation of the previous one.

Phase 2: Drawing up a request for tenders

Public consultation

With a public market consultation, we seek feedback on past experience and ideas for the future from industry players and stakeholders from the local community so we can further improve the tender process.

The consultation will look, for example, at which ranking criteria should be included or improved, or what the most realistic tender timetable and project planning should be to reduce risk and ensure success. The feedback received helps us to refine the design of the tender process and the requirements for permit applications.

Selection of tender process

The Ministry of Climate and Green Growth chooses the type of tender process it will use. The Offshore Wind Energy Act provides for 4 possible procedures:

• Tender with subsidy: Here, the permit is awarded to the bidder that requests the lowest subsidy for the energy the wind farm will generate. In practice, this type of tender has not been used for several years. Since the tender for the Hollandse Kust Zuid wind farm in 2019, developers have been building Dutch offshore wind farms without subsidies.
• Comparative test without financial bid: The tender application process includes qualitative criteria, such as the amount of electricity that the wind farm will generate. Applicants earn points for each criterion and the one that secures the most points in total wins the permit. Here, applicants are not required to make a financial bid to earn points.
• Comparative test with financial bid: This process also includes qualitative criteria, but it also includes a requirement for a financial bid to develop and operate a wind farm. Points are awarded for the financial bid as well as the other qualitative criteria. The applicant that secures the most points in total wins the permit. The Netherlands has been using this tender process since 2022.
• Auction: Here, the applicant that makes the highest financial bid wins the permit.

Publication of draft Ministerial Order

The Ministry of Climate and Green Growth produces a draft Ministerial Order, which is published on the RVO website. This draft Ministerial Order outlines the planned regulations for how the tender process for the permit to build and operate a wind farm will work and which conditions applicants must meet. It also specifies the criteria and scoring system for the comparative test, where applicable, so applicants know how they can earn the most points. 

At this stage, adjustments can still be made to the Ministerial Order. A new market consultation takes place, this time on the draft Ministerial Order. During the consultation, potential applicants and interested stakeholders can make proposals for adjustments to the Ministerial Order.

Once any changes are made, the Ministry of Climate and Green Growth publishes the final Ministerial Order in the Government Gazette, along with a policy rule on changes to the permit. The policy rule describes how we deal with a (possible) change in the winning project after the permit has already been granted.

Phase 3: Preparing for the tender

Potential participants in the tender round start preparing their applications

RVO keeps the industry informed about the tender process and planned requirements through various channels. All the information needed for an application is published on the RVO website. We also produce a newsletter with all the latest news about the tender, such as important changes or publications. Approximately 3 to 4 months before the tender opens for applications, we host a webinar to discuss the content and requirements of the tender.

Questions and answers

From the start of a new tender process, interested parties can ask questions about the application procedure. If necessary, RVO will answer these questions after consultation with the Ministry or the Directorate General for Public Works and Water Management (Rijkswaterstaat). All questions and related answers are published on the RVO website, ensuring complete transparency so that all parties have access to the same knowledge. We regularly update this with new questions and answers as they arise.

Phase 4: Tender opening

Submission of applications

As soon as the tender opens, companies/parties can submit their applications for a permit to build and operate an offshore wind farm at the designated site(s). This can be done in 2 ways:

• They can submit their application in person in a sealed envelope at RVO's office in Zwolle;
• They can submit their application by post or courier.

Phase 5: Assessment of applications

RVO registers the applications and performs a completeness check

After the tender application period has closed, RVO registers the applications in its administration system. All applications are assigned a unique number.

First, we check whether all the requested information is included with an application. If mandatory information is missing, RVO can reject the application.

Rijkswaterstaat assesses each application against the Wind Farm Site Decision and the Environmental Activities Decree

A part of each application goes to Rijkswaterstaat. Rijkswaterstaat investigates whether an application meets the requirements of the related Wind Farm Site Decision and the Environmental Activities Decree. The tender procedure rules state that when assessing an application, it must be checked that the proposed project does not conflict with the requirements of the Site Decision and that it is feasible for the wind farm to be completed and certified for operation on time.

Experts perform due diligence and plausibility test

Independent experts perform a due diligence investigation into each application. This is an analysis of the applicant's economic situation. The experts focus on the relationship between planned investment and maintenance costs and the estimated energy yields of the proposed wind farm.
A wind energy yield calculation is provided by each applicant, whereby they estimate the energy their proposed wind farm is expected to generate. Independent experts assess whether the calculation provided is convincing.

We perform a substantive test

Each application is initially assessed to ensure it meets the various requirements of, among others, the Offshore Wind Energy Act and the Ministerial Order. We also consider if it meets the requirements of the Wind Farm Site Decision and the Environmental Activities Decree and factor in the due diligence investigation and the plausibility test on the wind energy yield calculation.

So, what next if an application meets these initial tests? Depending on the tender procedure used, we continue to assess it in line with the procedures with the subsidy, the comparative test (possibly with a financial bid) or the auction.

Ranking criteria (for a comparative test)

The mandatory components (ranking criteria) of a comparative test are the certainty that you will build the wind farm and how much wind energy the wind farm is expected to generate. RVO can also establish other criteria per tender. In past tenders, these included ensuring that the electricity generated by the wind farm can be integrated into the Dutch energy system and the contribution of the wind farm to the nature of the North Sea. Applicants earn points in the assessment procedure for these ranking criteria.

Expert committee performs comparative assessment

For part of the comparative assessment, RVO can set up an independent expert committee. We look at what knowledge the expert committee needs to have to properly assess applications. Based on this, we look for independent experts.

We provide the expert committee with the part of applications that it must evaluate for the comparative assessment. After the assessment, the expert committee advises us. We adopt its advice in whole or in part.

We rank the applications in order and draw up the decision

The assessment is complete. RVO can then rank all applications in order based on:

• the most points scored (in a comparative assessment);
• the applicant that requests the least subsidy (in a procedure with subsidy);
• the applicant that offers the most money to obtain the permit (auction).

At this point it is clear which applicant will receive the permit. Once the tender winner is known, we will draw up the decision. This is the official government decision stating who will receive the permit.

Phase 6: Issuing the permit

We inform applicants if they will receive the permit

This is the moment to officially announce the tender winner. This starts with calling the winner. We will then publish the news on our website, among other places.

Applicants receive the permit or rejection

Once the winner has received the news, we will send the permit to the winner and rejection letters to the other applicants.

Objection and appeal procedure

People can file an objection to our decision within 6 weeks. This means they send a letter indicating they do not agree with our decision and ask us to review the situation. If we stand by our decision, they can then appeal against this outcome of the objection.

Phase 7: Management phase

Development of the wind farm

After the permit has been received, the winner of the tender can conclude contracts with the financiers and suppliers of their planned wind farm. After that, they can start building the wind farm. Read more about the construction phase of the wind farm.

Operation of the wind farm

Tender winners receive a permit to operate a wind farm for a maximum of 40 years. At the end of this period, they must remove the wind farm. They must leave the North Sea in its original state as much as possible. They must also provide a bank guarantee for the removal of the wind farm.

Assessment of a permit change

The intention is that a tender winner carries out the project as indicated in its application. However, it is possible that implementation of the project will, in practice, be different than indicated in the initial application. It is possible to change the project. However, to do this, a number of conditions must be met. These are stated in the Policy Rule for changing the permit. If a tender winner wishes to change their project, they must notify RVO in advance. We will then assess if the change to the project is allowed according to the Policy Rule.

Want to know more?

The permit procedure is one step in the process of being allowed to build an offshore wind farm. Before we organise a tender and after we issue a permit, a number of other steps are also required. Read more about the other steps for building an offshore wind farm.