Yesterday (19-12-2013), the government reached agreement about the reform of the support mechanism for offshore wind. This brings to an end a period of uncertainty about the future of state aid for the development of offshore wind turbine parks in the North Sea.
The Belgian Offshore Platform (BOP), an association of investors in offshore wind, has acknowledged this decision. The investors will now carefully assess its implications for the feasibility of future investments, in particular with regard to the question of securing reasonable conditions for the financing of high-risk projects of this kind.
Of course, each of the concessions so far granted will make its own sovereign decisions about the possibilities for further investment in their approved projects. The new support mechanism is more complex than the existing version, because intervention by the CREG will be more frequent. However, the new system offers the consumer a guarantee that the level of state support will decrease if the price of electricity generated offshore increases. This is an important principle, which was also an element in the Dralans consensus proposal.
Another positive feature is the fact that a return on equity of 12 % for these high-risk investments -which is still the view of the CREG – has been (re-) confirmed in the new system. The BOP will do all in its power to make use of the new support mechanism to ensure the successful realization of the planned offshore wind parks, although we must be under no illusion about the seriousness of the challenge that still faces us.
Jean de Leu,