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05.02.19 Offshore wind in Belgium: a fresh breeze of competition

Regulatory
February 5

The Belgian Federal Agency for Electricity and Gas (the CREG) issued a study on 20 December 2018 in which it discusses financial support for offshore wind farms after 2020 (https://www.creg.be/nl/publicaties/nota-z1880) (the Study). The Study is legally non-binding and results from a demand of the Belgian Federal Government (the Government). The Government expressed its will to change both the financial support for offshore wind farms and the allocation system of concessions for offshore wind farms in autumn 2018. The Government aims at an optimisation of return on its investment by a competitive tendering procedure.

In the Study, the CREG emphasises the importance of efficiency. It expressly warns that the allocation of financial support according to building capacity instead of energy return could lead to suboptimal results.

The CREG asserts the following:

  • The concession of the offshore wind farms and the financial support should be granted simultaneously, thus the tendering decisions should be granted with financial support;
  • The CREG rejects financial support for installed capacity, but advises financial support per MWh, injected into the grid;
  • In order to limit  the risks for  operators of offshore wind farms who depend on the actual electricity production, which is in its turn dependent on insecure wind conditions, the CREG proposes a dynamic provision of financial support consisting of an advance payment scheme;
  • The financial support should depend on the offered price for the electricity;
  • The CREG warns of the qualification of financial compensation for electricity production implying negative electricity prices  as (forbidden) state aid;
  • The CREG advises a financial cap for tenders;
  • The CREG defends the division of the tender into different lots. Each lot should represent a wind farm with a capacity between 300 MW and 500 MW.

Jens Debièvre • +32 2 787 90 65 • jens.debievre@lydian.be

Kyoto van Herreweghe • +32 2 787 91 07 • kyoto.vanherreweghe@lydian.be