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Belgium to end "irresponsible" excess profit from offshore wind

By: James Bernthal-Hooker 09/01/2023 Federal Government of Belgium

General Windfarms

Under a new support system, it is no longer possible to make excess profits from Belgian offshore wind. The support mechanism for Belgium’s five most recently built offshore wind farms is to be revised by the federal government.

According to the government, the energy crisis has hit offshore wind hard, prompting talks between industry and government on how an improved support mechanism can help stabilise the investment climate and avoid "irresponsible" excess profits from volatile energy prices.

These projects – Rentel, Norther, Seamade (SeaStar), Seamade (Mermaid), and Northwester 2 – have received support to date, but each will now enter a two-sided contract for difference. This means that the government will support wind farms when energy prices are too low to make them profitable, but if prices are high enough to create excess profit, these excesses go back to the government.

The projects have previously enjoyed a one-sided variable support mechanism based on the market price of electricity, but this has been complicated by increased energy prices resulting from the war in Ukraine. The new scheme is described as both “a crisis measure” and “evolving towards a more balanced system for the long term future”.

The change does not affect older wind farms, which do not make excess profits, according to CREG, the energy regulator. The four oldest wind farms in the first zone received fixed support not linked to market prices, and have all concluded long-term contracts, selling electricity at “very low” prices.

The government reached an agreement in principle to implement these changes in December.

This story was first reported exclusively for 4C Offshore subscribers. For more information, click here

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Belgium to end "irresponsible" excess profit from offshore wind

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