The mood within the sector, however, is sombre. Jurgen Ackaert of project developer Electrawinds, which built nothing last year despite being responsible for most of 2002's new capacity, cites strong resistance from local councils as a major obstacle to further Belgian development. Tackling that resistance effectively is currently "too politically sensitive," he believes.
Koen Makelberger of Flemish generating concern Aspiravi points to the regulation forbidding the construction of wind turbines within 250 metres of a building as the major practical constraint. "Effectively every site in West Flanders where it is possible to build wind turbines now has a project pending. The problem is now getting the plans past the local councils." Aspiravi, which took over the generating capacity of the numerous local power companies when the Flemish power market was liberalised in April 2002, currently has some 74 wind projects "in development," but expects to build only about 10-15 MW this year.
Geographically, the year was notable for the surge in new capacity in the inland region of Wallonia, which provided the year's three largest projects -- at Butchenbach, Saintode and Gembloux (table). But Ackaert downplays the significance of this geographical shift. It is not a sign that conditions there are any more favourable than in Flanders, he says. "It's just that there are no wind farms in Wallonia at present, so they have to build more in order to meet their renewables obligation."
Belgium's wind market frameworks are different in the two regions, though both are three years old and both are based on an obligation to meet renewables mandates, facilitated by a system of tradable renewable energy certificates. In Wallonia last year, power companies were required to source 3% of their sales to renewables, including "quality" combined heat and power (CHP). This year the mandate is for 4%. Flanders set a target of 1.2% in 2003 rising to 2% in 2004, but it excludes CHP from classification as a renewable source of energy. Power companies failing to meet the mandate in Wallonia were required to pay a penalty of EUR 100 for each megawatt of shortfall from July 30. In Flanders, the penalty has been EUR 100/MW since March 31 last year and will rise to EUR 125 at the end of this month.
The second year of green certificate trading was not a great success in Flanders, says Marleen de Roye of the Flemish Organisation for Renewable Energy (ODE Vlaanderen). Many companies failed to pay their fines. Furthermore, Belgium's dominant power company, Electrabel, is reported to be passing on the cost of penalties to its customers, with the result that large industrial electricity consumers in Flanders, including BASF, Umicore, Solvay, Sidmar and Tessenderlo, recently asked the Flemish government to reduce the penalty level.
According to the Flemish certificate regulator, VREG, power producers required around 600,000 certificates to meet their 2003 renewables obligation. By November, only 261,000 had been issued. Certificate prices in Flanders averaged EUR 0.8951/kWh over the last nine months of 2003, compared with EUR 0.6333 in 2002. The Wallonian electricity regulator, CWAPE, issued 550,000 certificates and estimates that generators hold a further 200,000 in unused stock.
It is generally accepted that meeting Belgium's renewables mandates will require extensive offshore development. The national government has recently released a zoning plan which identifies sites for some 2000 MW of offshore wind plant (page 90). Some observers suggest the existence of the plan may stifle development on land by providing local councils with another reason not to grant site permits. Makelberger and Roye, however, play down its likely impact.
The prospects for Flanders in 2004 look slightly brighter, says De Roye, with large projects scheduled for Antwerp and Zeebrugge. The Belgian wing of Dutch utility Nuon is developing the Antwerp project, while Belgian power generator SPE is working on the Zeebrugge site. Electrabel is also planning wind plant at Wondelgem (4 MW), Hoogstraten (12 MW) and Hooglede (1.7 MW).
Electrabel has also announced it is to issue EUR 1 million in bonds to provide additional finance for these projects. The Belgian utility hopes the five year bonds, which have a face value of EUR 250 per bond and offer a 4.15% interest rate, will become a popular investment vehicle, in this way familiarising citizens with the concept of wind power and reducing local resistance to development.