Belgian Offshore Cluster (BOC) has urged the government ”not to take any impulsive and ill-considered decisions next week” with regards to the intention of the country’s Secretary of State for the North Sea, Philippe De Backer, to cancel concessions for future offshore wind farms.
As reported earlier, De Backer proposed revoking of concessions already granted for three offshore wind projects, the 246MW Seastar and the 300MW Mermaid, awarded to Otary, and the 224MW Northwester II, awarded to the consortium of Colryut, TTR energy, InControl, and Wagram Invest.
According to De Backer, the three projects in question should instead be put out to tender and awarded to developers with lowest bids.
By doing so, the Secretary of State is undermining a highly promising, innovative young Belgian industry, BOC said. The damage that this decision threatens to cause – through reduced investments, job losses, compensation for damage, penalties and punitive charges – is likely to be a good deal greater than the financial benefit that the Secretary of State hopes to achieve by doing so, according to BOC.
For this reason, the organisation is calling on the federal government to commence the planned negotiations as soon as possible with the sector about setting the price for future wind farms. New technological developments, as well as the recent decision by Elia to establish an offshore ‘power socket’, will already have a cost-saving effect, BOC said.
”Secretary of State Philippe de Backer’s intention to cancel the concessions for future wind farms now threatens to destroy this domestic market completely, with all of the consequences this will have for the Belgian offshore industry,” BOC said.
”The Secretary of State believes that he will derive a benefit by creating a “blank slate” of the promised concessions, but that is very doubtful. Such a decision will result in a “standstill” period – just at the time that there literally needs to be an acceleration in terms of energy transition. Switching to a European tendering procedure will also mean a great deal of time being lost.”
With the cancellation of the concessions Belgium risks missing its 2020 renewable energy targets which could potentially lead to significant fines and penalties from Europe, BOC said, adding that a European tendering procedure would lead to a reduction of domestic content in the development and operation of wind farms.
”BOC is afraid that if the future concessions are cancelled, 80% of the economic benefit for our country will disappear – not to mention the threatened loss of job creation. The government’s contract cancellation is also likely to result in long, drawn-out legal proceedings and claims for compensation, which would be of no benefit to the Belgian economy,” the organisation said.