Belgium to tender for subsidised gas-fired electricity generation

Belgium will launch a tender to develop 800MW gas-fired capacity in January, which will benefit from a flexible support mechanism, the energy ministry confirmed on Friday. The capacity built as a result of this tender will probably be operational in 2016.

The flexible system will be based on where market prices are in relation to a model forecasting power and gas prices and power plant expenses. Companies taking part in the tender will include the amount of support they would need to receive from the government in their bids, with the lowest selected as the winner.

Financial support will be provided every year for six years on a retrospective basis, based on how actual market prices during the year compared to the government’s forecast. If market prices are below the model’s forecast, the company will receive the full support secured as tender winners. If not, support levels will be adjusted downwards, according to how high market prices were.

The limit to the support that can be requested is €90,000/MW installed per year for combined-cycle gas turbine (CCGT) plants and €45,000/MW installed per year for open cycle gas turbine (OCGT) plants.

The move comes as Belgium prepares to scale back its dependence on nuclear generation and is part of the government’s plan for ensuring security of electricity supply ( see EDEM 5 August 2013 ).

Companies will have six months to place bids, starting from the launch of the tender in January, the ministry spokesman said. Winners will be selected in the second half of 2014. Beatrice Mavroleon