Dutch offshore wind industry under pressure due to funding gap

The recent Draghi report states that Europe must invest heavily in strategic sectors such as offshore wind to become less dependent on external markets. Dutch offshore wind energy can substantially contribute to the European climate targets of 120 GW by 2030, but the sector's supply chain is threatened by increasing competition from other regions, such as China. The European market share in turbine assembly has fallen from 58% to 30% between 2017 and 2022. Without better financing policies and strategic investments, crucial production capacity risks moving abroad.

The Netherlands is missing out on investment opportunities

Due to high capital investments and long lead times for the development and adoption of advanced niche products, investments in the supply chain are considered risky. As a result, investors, according to JBR, are hesitant, creating a financing gap between demand and supply. Especially financing between € 2-10 million is difficult to obtain. At the same time, low margins due to competition from China and uncertain demand caused by slow electrification mean that innovation and scaling up are stalling.

The Dutch tender system still largely focuses on the highest bidder, which reduces margins and leaves insufficient room for innovative companies to implement their technologies at scale. The JBR report indicates that a revision of the tender system is necessary so that not only price, but also innovation, local employment, and sustainability play a greater role in project awarding. This will make the sector less dependent on cost-driven competition and provide more space for qualitative growth.

Funding solutions for innovation and scaling up

New funding solutions and innovation grants are needed to spread investment risks and stimulate capital injections. Additionally, the Netherlands can better utilize European funding opportunities, such as the € 5 billion EIB counter-guarantee, to close the financing gap and accelerate scaling-up. Through strategic collaboration between government, investors, and companies, the offshore wind sector can grow and remain competitive internationally.

Invest-NL and TKI Offshore Energy call for action

To maintain the Netherlands' competitive position in offshore wind, an action-oriented approach along the entire value chain is required. This calls for risk-mitigating financial instruments, adjustments to the tender system, and better utilization of European funding. Invest-NL and TKI Offshore Energy are committed to accelerating this change.

"The Netherlands has all the ingredients to remain a leader in offshore wind, but without action, there is a risk that a crucial sector for the Netherlands will move abroad. This report shows which solutions can reverse this trend. From Invest-NL, we will focus on developing financial instruments that mitigate risks and mobilize capital for the Dutch offshore wind sector," said Eva Ferrier, Business Development Manager at Invest-NL.