By Toby Sterling
SCHIEDAM (Reuters) - Swedish utility Vattenfall has won the right to build a 700 megawatt (MW) subsidy-free wind farm in the Dutch part of the North Sea, the Dutch Ministry of Economic Affairs said on Monday.
The Netherlands' government is among the first to offer a so-called zero subsidy tender for wind power, in which only bids that required no government support could compete for the two 350 MW slots known as Hollandse Kust I and II.
Vattenfall beat Norway's Statoil (OL:STL) and Germany's Innogy in the tender. Its Dutch subsidiary Nuon will build and operate the wind farm, with an expected completion by 2022.
The wind farm in the Dutch North Sea will provide enough sustainable electricity for one million households, the ministry said in a statement.
"Thanks to drastically lower costs, offshore wind farms are now being constructed without subsidy," Minister of Economic Affairs Eric Wiebes said. "Innovation and competition are making sustainable energy cheaper and cheaper, and much faster than expected, too."
The Hollandse Kust was the third of five tenders being held by the Dutch in a push to create 3,500 MW of offshore wind power by 2023.
The first two projects, for 700 MW each, were awarded in 2016 to Danish energy company Orsted and a consortium including Anglo-Dutch oil major Royal Dutch Shell (LON:RDSa) and Dutch energy provider Eneco.
"We think it is absolutely spectacular that windmills at sea can now compete with new gas and even coal-fired power plants," Greenpeace said, calling on the government to double wind energy targets.
Surging demand for wind energy, technological progress, competition among turbine makers and low interest rates have enabled the Dutch to lower the cost of building wind farms by 55 percent, the ministry said.
The Hollandse Kust wind farm, to be located 22 km (13.7 miles) off the coast, will help the Dutch reach a renewable energy target of 16 percent of their energy mix by 2023.
The government plans to add a further 7,000 MW in offshore wind capacity between 2024 and 2030, as it seeks to turn around a track record as one of the most polluting countries in Europe.
Solar, wind and biomass accounted for only 6 percent of all energy used in 2016, making the Netherlands the worst performer in the European Union apart from Malta and Luxembourg.
The next tender for offshore wind power in the Netherlands will be held later this year for Hollandse Kust Wind Farm Sites III and IV.