Belgium to Launch Tender Next Month for First Offshore Wind Farm in Princess Elisabeth Zone

September 16, 2024, by Adnan Memija

The European Commission (EC) has approved a EUR 682 million Belgian scheme to back the construction and operation of an offshore wind farm in the North Sea. This approval sets the stage for the auction, planned to be launched on 28 October, for the first 700 MW wind farm in the Princess Elisabeth Zone.

The plan includes running a competitive tender to grant the rights to build the first offshore wind farm in the Princess Elisabeth Zone in the North Sea, which is expected to generate at least 2.6 TWh of renewable electricity per year and is expected to be operational by the end of 2028.

The aid will take the form of a monthly variable premium under a two-way contract for difference (CfD) over 20 years.

The state aid scheme was approved under the State Aid Temporary Crisis and Transition Framework (TCTF) adopted by EC on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.

The price premium will be granted for the potential electricity production of the offshore wind farm rather than for the actual electricity production, EC said.

The price premium will be calculated by the Belgian regulator CREG by comparing the strike price, determined in the tender off of the selected beneficiary, to a reference market price for electricity. When the strike price exceeds the reference market price, the difference (price premium) is paid by the Belgian State to the beneficiary. Conversely, when the reference market price exceeds the strike price, the beneficiary will have to pay the difference to the Belgian authorities.

For the first time, citizen participation will be a mandatory criterion, said Belgium’s Minister of Energy Tinne Van der Straeten. In addition, a maximum strike price cap of EUR 95 per MWh will be enforced to ensure the cost to society is as low as possible, the minister added. Projects above this threshold will not be considered.

The Princess Elisabeth Zone, whose main development is the Princess Elisabeth Island, the world’s first artificial energy island, will see up to 3.5 GW of new offshore wind farms connecting to the island’s infrastructure.

The artificial energy island will be built some 45 kilometres off the Belgian coast, within the Princess Elisabeth offshore wind farm zone, and span approximately five hectares above water. The area that will house the electrical infrastructure will be built across approximately six hectares.

The island is expected to be built by 2026 and connected to the grid by 2028, with the first turbines operational by then.