Dutch environmental agency warns on North Sea wind project delays

By Toby Sterling

AMSTERDAM (Reuters) - Delays in the Netherlands' rollout of offshore wind are already leading to higher greenhouse emissions and more are expected, the country's PBL environmental assessment agency warned on Thursday.

A rapid expansion of wind turbines in the North Sea is a cornerstone of Dutch environmental policy, with grid company TenneT planning to spend more than 100 billion euros ($108 billion) to support it.

The government in April pushed back plans to increase capacity from 4.7 gigawatts (GW) at present to 21GW to the end of 2032 instead of 2030, citing costs, supply chain difficulties and "challenges in timely decision-making".

The PBL said delays are leading to more electricity being generated from fossil fuels.

Forecasts for Dutch 2030 emissions "are especially dependent on the tempo with which wind at sea projects are realised," it said.

The government has said it has "the ambition" to further increase offshore wind to 50GW by 2040, but the agency noted that space for them is not reserved and it is uncertain the 2032 target will be achieved.

"It is an open question whether the extra investments in wind energy at sea will be realised," it said, citing the prospect of worsening profitability as prices fall during peak wind production hours.

"If producers cannot earn a return on investments because of that, they will probably not invest," it said.

In June the government successfully auctioned 4GW worth of offshore wind permits, though returns were lower than in previous rounds and Eneco withdrewfrom bidding, citing the worsening business case.

Earlier this month market regulator ACM said it is drawing up plans to introduce a tariff on producers, including offshore wind operators, for supplying electricity to the grid.

Electricity producers say that will discourage investment.

($1 = 0.9259 euros)

(Reporting by Toby Sterling; editing by Jason Neely)