The European Commission has approved a substantial €682 million state aid scheme from Belgium aimed at bolstering renewable offshore wind energy as part of the transition to a net-zero economy. This decision aligns with the State Aid Temporary Crisis and Transition Framework (TCTF), initially adopted on March 9, 2023, and later amended on November 20, 2023, and May 2, 2024.

Under the approved scheme, Belgium will support the construction and operation of the first offshore wind farm in the Princess Elisabeth Zone of the North Sea. The facility is projected to have a capacity of 700 MW and produce 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 take the form of a monthly variable premium under a two-way Contract for Difference (CfD). This premium will be paid over 20 years based on the wind farm's potential electricity production, rather than its actual output. This approach aims to link the revenues of renewable energy producers directly to market prices by compensating the difference between the strike price and the reference market price for electricity.

The Belgian regulator, CREG, will oversee the calculation of the price premium. If the strike price exceeds the market price, the Belgian state will cover the difference. Conversely, if the market price is higher, the wind farm operator will pay the difference back to the Belgian authorities.

The Commission affirmed that the scheme meets TCTF conditions, including an estimated volume and budget, a clear competitive process, and aid disbursement before December 31, 2025. The measure is deemed necessary and proportionate for accelerating the green transition and supports key sectors vital for the Green Deal Industrial Plan.

Margrethe Vestager, Executive Vice-President in charge of competition policy, remarked, "Today, we approved this €682 million measure enabling Belgium to support the construction and operation of the first offshore wind farm in the Princess Elisabeth Zone in the North Sea. It will help Belgium reduce its dependence on Russian fossil fuels while minimizing potential competition distortions."

The non-confidential version of the decision will be accessible under case number SA.107336 in the State aid register on the Commission's competition website following the resolution of any confidentiality concerns.