Market Status: Benelux - Project finance leads the way in Belgium

BENELUX: The Benelux countries are faring rather differently, with the Belgian offshore sector coming up with innovative financing models, while progress in the Netherlands is hampered by lack of government support.

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At 46 kilometres out to sea, the world's furthest offshore wind farm, the 165MW Belwind project, was completed last year off Belgium's North Sea coast. It brings offshore wind capacity to 195MW, securing the country fourth place in the European offshore wind league - ahead of countries with bigger potential offshore resources.

The 55 Vestas 3MW turbines are sited on Bligh Bank, off the coast of Zeebrugge, in water depths of up to 37 metres - the deepest for any wind farm. The EUR614 million project was built by a partnership of Belgian and Dutch investors: Colruyt Group, Flanders Financing Company PMV, Dutch holding SHV, co-operative energy society Meewind and Rabobank. The project is the first phase of a 330MW wind farm. The Belwind consortium hopes to start work on the second 165MW phase in 2012.

Belwind is the largest operating offshore wind farm to be financed on a non-recourse basis. Indeed, Belgium is showing the world how project finance for offshore wind should be done. This was the route taken for the country's first offshore wind farm, the 30MW Thornton Bank demonstrator, and last year its owner C-Power closed the world's biggest offshore financing in the EUR1.25 billion second and third phases of Thornton Bank.

The 295MW project will mark the first commercial deployment of Repower's 6.15MW turbine. The 48 machines will be installed on jacket foundations and construction is expected to take place between 2011 and 2013. The finished 325MW project will provide 10% of Belgium's 2020 target of 13% of energy from renewables.

This year, developers also hope to complete finance on the 216MW Eldepasco project. A consortium of Belgian firms Electrawinds, Depret, Aspiravi and Colruyt Group has chosen Vestas as preferred supplier. The 72 turbines will be sited 37km offshore on Bank-Zonder-Naam.

Six sites have been awarded concessions by the Belgian government, but the seventh and furthest out to sea - which is still up for grabs - had its area reduced by 40% in December to make way for shipping in and out of the port of Rotterdam. Earlier in 2010, a study by federation of renewable energy producers Edora found that if Belgium is to reach its goal of 2.8GW of North Sea wind capacity, the government must move quickly to open a new zone for wind development.


Progress on offshore wind in the Netherlands has been disappointing. Only two 300MW projects were successful last year in the second round of the Stimulering Duurzame Energie programme of financial incentives for offshore wind. Both are being developed by the German Bard Group, which renamed its Bard NL1 project Buitengaats and its GWS project ZeeEnergie.

Since winning the call for proposals, Bard has teamed up with Dutch green investment firm Typhoon Offshore to build the projects - both sited around 55km north of the Waddenzee, adjacent to the German territorial limit.

Twelve consented projects participated in the tender for the 15-year incentive payments. With support available for up to 950MW, the industry had expected three rather than two successful bidders. However, the government says that money remaining from the EUR4.5 billion budget will be offered to other bidders. It is expected to realise a further 100MW of capacity.

Dutch offshore firms claim the government's lack of urgency and its unpopular support programme threaten the country's target of 6GW of offshore wind for 2020. The Netherlands Wind Energy Association says the current policy is creating unnecessary market risk and driving up the price of offshore wind-generated electricity.

Meantime, the Dutch government is working on the details of the next renewables incentives programme, SDE+, which it plans to launch by July.

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