Rising costs, lower demand prompt Netherlands to scale back 2040 offshore wind goals

The Dutch Government on Wednesday scaled back plans to build offshore wind farms in the next 15 years, citing rising costs and lower-than-expected electricity demand from industry.

The government said its previous target of achieving total offshore wind capacity of 50 gigawatts by 2040 was no longer realistic, and would be replaced by a new goal of between 30 and 40 GW.

"The international market situation for offshore wind is very challenging," Climate Minister Sophie Hermans said in a letter to parliament.

"Costs have risen, while the electrification of industry is going slower than expected, increasing uncertainty over future demand for sustainable electricity." The construction of data centers to support artificial intelligence, however, is testing some utilities' ability to keep up with electricity demand.

The Netherlands last year already pushed back plans to increase offshore wind capacity in the Dutch part of the North Sea from 4.7 GW currently to 21 GW by the end of 2032, instead of 2030, over similar concerns. In May, it postponed tenders for two offshore wind farms with a total capacity of 2 GW due to a lack of interest from potential bidders.

Hermans has promised detailed plans for future tenders by the third quarter, including possible new subsidies, as prospective bidders are backing out of the current "zero subsidy" model.

(Reporting by Bart Meijer; Editing by Rod Nickel)