European Commission Greenlights €682 Million Belgian State Aid for Offshore Wind Energy

The European Commission has approved a €682 million Belgian state aid scheme to support renewable offshore wind energy as part of efforts to accelerate the transition toward a net-zero economy. This initiative falls under the State aid Temporary Crisis and Transition Framework (TCTF), which the Commission initially adopted on 9 March 2023 and later amended on 20 November 2023 and 2 May 2024. The Belgian government notified the Commission of its plan to invest in renewable offshore wind energy, with a focus on developing the first offshore windfarm in the Princess Elisabeth Zone in the North Sea. This windfarm is expected to have a capacity of 700 MW, capable of producing at least 2.6 TWh of renewable electricity annually.

The aid will be allocated through a transparent and non-discriminatory competitive bidding process. It will be provided in the form of a monthly variable premium under a two-way contract for difference (CfD), paid over a 20-year period. The price premium is based on the potential, rather than the actual, electricity production of the windfarm, allowing market prices to influence the revenue of the renewable energy producer. The Belgian energy regulator (CREG) will calculate the price premium by comparing the strike price, determined through the tender, with a reference market price for electricity. If the strike price is higher than the reference price, the Belgian state will pay the difference to the beneficiary. However, if the reference price exceeds the strike price, the beneficiary must reimburse the difference to the Belgian authorities.

The European Commission found the Belgian scheme to be in line with the TCTF conditions, as it adheres to several key principles: (i) the aid will be granted under a well-defined budget and volume; (ii) the aid amount will be determined through an open, transparent, and competitive process; and (iii) the aid will be awarded before the deadline of 31 December 2025. The Commission concluded that this scheme is essential, appropriate, and proportional to accelerate the green transition, facilitating economic activities crucial for the implementation of the Green Deal Industrial Plan. This approval aligns with Article 107(3)(c) of the Treaty on the Functioning of the EU and meets the conditions outlined in the TCTF, leading to the Commission's formal endorsement of the aid measure under EU State aid rules. On March 9, 2023, the Commission introduced the TCTF to promote support measures in sectors essential for advancing the transition to a net-zero economy, in alignment with the Green Deal Industrial Plan.