Why the North Sea as a green energy factory is important for you now

From fossil treasury to sustainable powerhouse

The North Sea aims to emerge as Europe's sustainable energy hub. The Netherlands has a strategically important role in this with a long coastline and several landing sites. However, the sector is also experiencing some headwinds and so the ambitious target of 50GW of offshore wind energy by 2040 has been reduced to between 30 and 40 GW (1). This adjustment has been driven by the lagging electrification of the industry and the rising cost of wind farm construction. We from JBR touched on these themes earlier in a study in collaboration with Invest-NL and TKI Offshore Energy.

Despite the scaled-back target, much will have to be done in the coming years to meet the new goals. There is currently only ~5GW of installed offshore wind power capacity in the Netherlands. For wind farm developers, the biggest problem is that there must be sufficient demand for electricity to sell the generated power at a good price. Electrification of the industry will be important for this. This problem is well highlighted by the most recent tender for wind farm Nederwiek I-A, for which no tenders were received. This farm should be operational by 2030 with a capacity of 1GW and start supplying power to one million households.

Energy hubs contribute to offshore wind development

In the demand for wind energy, energy hubs on the coastline will play a pivotal role. Concentrating large-scale industrial electrification within coastal clusters enables efficient utilization of electricity generated from offshore wind sources. This reduces grid congestion and transportation costs, facilitates large-scale hydrogen production, and utilizes existing port infrastructure for energy storage and distribution. As a result, these hubs strengthen both industry sustainability and the international energy position of the Netherlands.

International collaborations such as LionLink, between the Netherlands and the UK, are the first concrete steps toward smart energy hubs at sea. Linking one wind farm to two countries creates a hybrid connection that both supplies power and connects countries. Smarter, more efficient and scalable. Plans for energy hubs, such as the North Sea Wind Power Hub^[2] and the Danish Energy Island^[3], also guide the future: a single central hub that distributes power between multiple countries. The technology is complex and construction costs can cause delays, but the promise is clear: lower costs, less dependence, more security of supply.

Energy hubs on the coastline in the Netherlands, and the connection between countries, ensure that we are working towards a fully connected energy factory on the North Sea.

From Vision to Action

Many Dutch companies are active in the construction, engineering, financing or maintenance of these large-scale projects. From cable manufacturers to shipyards, shipping companies and shipowners, and from ports to investors: the energy transition at sea requires long-term vision and cooperation, both nationally and internationally. At the same time, there are obstacles such as relatively long lead times and lack of sector knowledge among investors. Businesses that respond proactively have the opportunity for sustainable structural growth.

Making the transition to a sustainable sector requires healthy margins throughout the supply chain, just like in the oil & gas sector. The oil and gas sector has previously demonstrated that healthy margins can facilitate increased investment in technology and knowledge, thereby strengthening the entire supply chain and enhancing its appeal to skilled professionals. However, the recent tender for Nederwiek I-A is a sign that further progress is required. A first good step in the direction could be the introduction of CfDs (Contracts for Difference).

Pioneering with the right partner on board

The future lies at sea. But anyone who wants to take the step to offshore energy needs a reliable guide. Someone who knows investment risks, gets partners on board and maps out the route.

At JBR we combine in-depth knowledge of corporate finance and strategy with sector experience in maritime, offshore and energy. Despite the turbulent waters, the wind is favourable and the energy transition is unstoppable. We help you hoist the sails and keep course.

A client about us

"JBR speaks our language. They understand the reality at sea and the markets where we work:

momentum, the risks and the opportunities.

Mutual trust has ensure that the cooperation pleasant and effective."

Rob Boer, Managing Director
Acta Marine

Footnotes

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