Assessment of imbalance settlement exemptions for offshore wind power generation in Belgium

This article deals with a specific support mechanism exempting offshore wind power generators partially from their balancing responsibilities by means of a tolerance margin. This specific support mechanism was enforced in Belgium as from 2009 and is defended by its proponents in view of the lower power output predictability at offshore locations. Although policies accommodating offshore developments may be seen as important to tap better wind resources, this contribution stresses the importance of full balancing responsibility for variable renewables. After a detailed evaluation of the support mechanism and its impact on the balancing costs for wind power generators, the use of current applied production support mechanisms is recommended. These can be used to acquire the same financial effect without increasing market complexity and harming the operation of the balancing market. The first part of the study deals with the specific implementation of the tolerance margin in the Belgian context. Secondly, its underlying motivation is quantitatively assessed, namely the relatively higher offshore prediction errors. Finally, the total offshore subsidy resulting from the measure is determined. Expressed in [euro]/MWh, this subsidy is currently determined at [euro]1.4-1.7/MWh, which represents the required increase of production support in order to replace the regulation.