The Dutch offshore wind sector has come to a crossroads as recent tenders, IJmuiden Ver Gamma A and B and Nederwiek, have either attracted no bids or been postponed. This happened due to rising development costs, subsidy-free tender designs by the government and uncertain electricity prices. In the past, the Netherlands utilised a one-sided Contractfor- Difference mechanism before moving to tender without financial support. This led to zero-subsidy bids by offshore wind developers, who gambled on favourable electricity prices. In response to the failure of the recent tenders, a coalition of market parties called for the introduction of two-sided CfDs. This thesis studies which CfD design will actually best enable the Dutch Government to reach its target of 40 GW by 2040, whilst balancing the trade-off between minimising the public support costs and maximising developer participation under uncertain electricity prices and costs. To address this complex issue, this research builds a multi-agent model in Python using the Mesa library, which enables the simulation of Dutch offshore wind tender auctions whilst incorporating bidding behaviour and strategy. The previous literature provides three different CfD designs: the one-sided CfD, the two-sided CfD and the Financial CfD. Each CfD is simulated in the model under a single-unit, pay-as-bid pricing tender format, with auctions being held twice a year until 2040. Each developer calculates a break-even strike price based on an NPV = 0 strategy, using individual beliefs about future electricity prices spread across three price levels and individual cost parameters, adjusting their risk appetite after each round based on the auction outcome. The model is then subjected to Monte Carlo Simulations, a sensitivity analysis and scenario analysis. The performance of each CfD is determined by the following metrics: deployment success rate, total subsidy cost, mean total number of exited agents per run, mean number of participating agents per tender, mean number of distinct winners per run, ceiling price rejection rate, and mean winning strike price. The research yields the following insights. From a developer’s perspective, CAPEX and capacity factor have the greatest impact on the strike price bid, more than OPEX or electricity price expectations. Furthermore, the ceiling price is the primary constraint on successful deployment. Under baseline conditions, the ceiling price rarely constrains developers. From the results of the ceiling price experiment, it is clear that the ceiling price acts as a market participation constraint, and its influence becomes apparent once the ceiling price level is lowered, leading to more unsuccessful simulations that fail to reach the 40GW target. Under high-cost scenarios, the two-sided CfD collapses almost entirely, succeeding in only 1.3% of the simulations. The one-sided CfD meets the target in only 19.2% of runs, whereas the financial CfD is the most robust, achieving a deployment success rate of 61.2%. This resilience is directly caused by the reference-generator bidding approach, in which the developer’s bid is partially decoupled from their costs, allowing lower bids below the ceiling price. The designs also produce very different fiscal effects. The financial CfD swings the most in fiscal results, from roughly €119bn in support costs under a low-price, high-cost scenario to a clawback of approximately €265bn under high realised electricity market prices. The two-sided CfD offers the largest recovery when electricity prices are high and costs are low, but it is easily disrupted when costs rise. The one-sided CfD results confirm the worries of market parties, where market competition forces zero-subsidy bids and the CfD offers no protection against rising costs. It exposes the government to subsidy costs when realised prices are low, whilst generating no revenue when prices rise. This thesis contributes to the CfD literature by developing a model that compares all three designs within a single multi-agent framework with repeated auctions. No single design performs best on both deployment success rate and cost, so the choice depends on the government’s preference, the first important finding of this thesis. A government prioritising the 40 GW target amid cost uncertainty should favour the financial CfD, which offers the most reliable path to the target but carries the risk of high subsidy costs or a substantial clawback. A government prioritising fiscal certainty in a stable cost environment may prefer the two-sided design, which delivers the largest net recovery, but collapses the hardest and provides the least competition. For both cases, the ceiling price policy plays a crucial role, with the current fixed price of 104€/MWh diminishing the viability of deployment under rising costs. This leads to the second significant finding of this thesis: a fixed ceiling price set above expected bids under normal conditions is rarely active but becomes the decisive constraint on achieving the target when costs rise. The ceiling price acts by excluding participants rather than by changing prices, making its calibration as important as the choice of CfD design itself. Offshore wind is the largest component of the Netherlands’ plan to decarbonise its electricity and industrial sector, and the design choices made for the future offshore wind tender auctions will play an important role in whether the target of 40GW is reached. CfDs offer several possible pathways towards the desired target, but the Dutch government must also take into account the potential subsidy costs relative to deployment success and the ceiling-price policy that creates their desired market. Otherwise, it could lead to a repeat of the past failed tenders. Whether the Dutch government heeds that warning and reignites the offshore wind sector will be seen in the upcoming tenders. ... Read more