Elia Transmission Belgium (ETB) has announced it is temporarily postponing the signing of the final contracts for Princess Elisabeth Island due to the price increase for high-voltage direct current (HVDC) infrastructure.
Postponing the signing of the contracts is not without consequences but provides extra time to weigh the current design against alternative concepts in the changing market context, according to the company.
These alternatives are also feasible but require a joint action plan with all the parties involved, as there are currently too many uncertainties both in policy and regulation, it added.
Given the strategic importance of the Belgian energy island and its crucial role in the country’s electricity supply in the coming decades, Elia said it wishes to keep all options open by postponing the signing.
Meanwhile, the construction of the artificial island (foundations) and the implementation of the already-signed alternating current (HVAC) contracts remain on track.
This ensures the realisation of two (700MW + 1400MW) of the three future offshore wind farms, meaning 60% of the new Princess Elisabeth wind zone is already being implemented, Elia said.
To connect the third wind farm (1,400MW), Elia is currently negotiating for two HVDC converters (one on the island and one on the Belgian coast).
These converters must, in addition to connecting this wind farm, also enable the development of a hybrid interconnector to the UK (Nautilus project).
The international tender that Elia has set up for these direct current components shows an overheated supply chain with significant price increases, the company reported.
Although the terms from the supplier involved are comparable to those of other European grid operators, they are – despite its efforts – much higher than our initial estimates, Elia said.
This significant cost increase – specific to HVDC – is due to scarcity, combined with the rise in material costs and inflation.
To realise the HVDC contracts within the set timeframe (by 2032), the chosen supplier has given us a deadline to award the proposed contract by mid-February 2025 at the latest.
The company said: “Since Elia, as a grid operator, implements decided policies, it seems inappropriate to us, in the current exceptional market conditions, to make a unilateral decision without further political support.
“To keep all options open, Elia has analysed various alternatives over the past few weeks, weighing the pros and cons and taking a range of uncertainties into account.
“These are complex analyses that require considerable expertise and are currently being discussed calmly with all stakeholders.”
As Elia will not be awarding the negotiated HVDC contract in February 2025, the HVDC converters will not be built to the original schedule, the developer said.
It will be up to the government to confirm or revise the reference concept, it added.
Elia said: “This is a strategic decision regarding Belgium’s electricity supply for the coming decades. If the reference concept is chosen, the construction of the HVDC converters will be postponed to a date to be determined with the equipment manufacturers.
“The project’s overall lead time is estimated at around three years.”