Belgium postpones offshore wind auction as government fears risks and budget impact

The Belgian government has decided to suspend the auction for a planned 700 MW offshore wind farm in the North Sea. It cited legal risks and concerns about the budget impact of rising costs. Belgium has thus joined the ranks of countries that have faced problems with offshore wind farm auctions in recent years.

The liberal reformist party said, according to Renewables Now, that the auction launched by the previous government carried significant legal risks, had an unrealistic timeline and lacked a clear financial framework. The current government has therefore decided to suspend the auction and revise its terms. According to the government, a revised auction with more transparent terms should be launched by the end of the first quarter of next year at the latest.

"Continuing with this approach would expose the state to significant legal risks and a considerable budgetary burden," Belgian Energy Minister Mathieu Bihet said, according to Renewables Now.

The cancelled auction concerns the Princess Elisabeth Zone I, which covers 46 square kilometres, and is part of a planned series of auctions running from 2024 to 2028 that are intended to secure up to 3500 MW of new installed offshore capacity for Belgium.

Problematic offshore auctions are a recurring theme

Belgium is far from the first country to have faced problems with offshore wind farm auctions in recent years. Whether due to rising costs and bid prices or a decline in investor interest caused by insufficient support, auction terms have been changed in a number of countries.

A relatively recent example is Denmark, where last year's offshore wind auction failed completely. As costs rise, wind farm developers are reluctant to pay governments for the sites being auctioned and are calling for a return to an operating support scheme. Denmark therefore plans to relaunch auctions this autumn and allocate billions to support offshore wind farm construction.

The Netherlands has also recently changed the terms of its offshore auctions. The government there decided to cut the auction volume to just one third amid concerns about insufficient investor interest. Investors are also becoming less willing to invest in offshore wind farms in Germany, where last year's auction resulted in developers committing to pay the state only a fraction of the amount pledged in the previous round.