Monty Python, anticlimaxes and Dutch offshore wind 

Revenues 

If you want to form a sensible view on this, you need to look at the revenue line an offshore wind farm needs to be successfully financed, built and operated and compare that to the price of electricity an operator can obtain in the market. As both are typically expressed in EUR/MWh, let’s first convert Hermans’ budget into something comparable. The table below illustrates at the highest possible level what the budget gets you for an “average” 2 GW offshore wind farm, over an assumed pay-out period of 15 years (in line with the Dutch SDE++ support scheme).  

Table 1: Hermans’ offshore wind budget in EUR/MWh, assuming a 15-year support payout period 

Normalising recent tender results from France (September 2025) and Ireland (November 2025) with broad brush strokes shows that the winning bidders assumed a nominal revenue level between 75 and 90 EUR/MWh over 20 years to make their business cases work. Applying auction results from other jurisdictions to our Dutch case is obviously a simplification. The exact level will be driven by project factors (such as site-specific water depth, soil conditions, wind speeds, risk profile, etc.) and hence needs to be determined bottom-up based on a lot of variables. However, for the purpose of this post, let’s assume for argument’s sake that our Dutch wind farm can make do with the simple mid-point, i.e. 82.50 EUR/MWh paid out over the 15-year SDE++ period.  

Forecasts are difficult, particularly relating to the future 

Now let’s look at Dutch electricity price projections, an equally tricky topic. In the absence of a public long–term power price forecast, one could look to the Dutch forward electricity prices, which trade up to four years in the future, to at least get a sneak peek of how the market sees the near term. Note that these futures concern baseload power and therefore need to be corrected for offshore wind capture rates to take into account profile losses and approximate the average price an offshore wind farm would manage to obtain. The Netherlands Environmental Assessment Agency (PBL) recently calculated the capture rate to be around 80% for 2024. Assuming this rate stays constant over time, an indicative proxy for offshore wind-specific forward prices for the coming four years can be computed as per the table below (i) 

Table 2: forward prices (baseload and offshore specific) 

The obvious question is: what happens beyond 2029? The above table shows a downward trend even before applying the profile losses. These losses are expected to increase as the build-out of turbines at sea continues, further suppressing the price wind farms can capture. At the same time, one could argue that at some point, electricity prices are bound to rise due to the electrification of society and the increase in electricity storage possibilities, at least partially offsetting this effect. For this analysis, we suggest simply assuming the long-term electricity capture price for offshore wind stays at the level of the 2029 forward (albeit corrected for further inflation beyond 2029). 

So, what happens when we put this all together? The graph below plots our required 82.50 EUR/MWh, along with our long-term electricity price proxy (corrected for 2% inflation post-2029). The turquoise columns highlight the delta (financial gap) between the two as of 2031 (the assumed generation start date for the wind farm to be tendered).  

Figure 2: Required revenue versus electricity price proxy 

As can be seen from the graph, the required revenue line sits above the assumed forward price, implying government support is needed to make the business case work. Furthermore, the delta exceeds the 8.02 EUR/MWh top-up calculated in Table 1 for pretty much the entire 15-year period. In fact, if you were to goal seek for the additional budget needed to plug the gap between the two, an additional amount of ~EUR 535 M would be needed.  

Our project could look to the market for support, and see if it can sell its offtake at a premium to (corporate) offtakers. In fact, this has been the government’s strategy for years. However, the combination of an increased cost base following the Ukraine crisis and the lagging demand for green electrons from industry has proven that this is a risky bet in the current context, with various failed auctions across Europe (including recently in the Netherlands). And the lower Hermans’ support budget, the bigger this bet becomes.  

Bridging for auction success

Of course, this analysis is simplified and takes some notable shortcuts. However, the objective is to show that the current budget is not sized to comfortably derisk the next Dutch offshore wind auction. Keep in mind that investors must factor in a wide range of uncertainties and will assess the impact of different scenarios on the available budget. To illustrate this:  

1. An increase in required revenue of just 1 EUR/MWh increases the budget shortfall by another ~EUR 130 M
2. Increasing or decreasing the forward electricity price by 1 EUR/MWh reduces or increases the deficit by ~EUR 150 M (ii) 

Any sensible investor will realise that the relative impact of fairly small changes in assumptions is huge.

Risking an anticlimax? 

Some further browsing on The Holy Grail revealed that the movie’s ending was actually born out of necessity: there was insufficient budget for an epic final battle (which is actually quite ironic in the context of this blog!). As the Pythons pondered their pecuniary position, they opted for a pragmatic solution that also made artistic sense. It could be that, in hindsight, Minister Hermans’ budget sizing turns out to be spot on. However, due to the importance of the sector for Dutch energy independence, job creation and climate objectives, it seems better to reserve a healthier budget now to ensure sufficient auction participation and avoid the anticlimax of another failed tender. 

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(i) For the capture rates, see PBL report 31 October 2025, page 5. For the forward prices, data is collected by Onno Toepoel at Zicht op energie (table shows 2025 average forward values, accessed on 16 December 2025) from the ICE Endex