Update on Princess Elisabeth Island

BRUSSELS | Today, the press published information on a CREG report analysing the increase in the cost (mainly the DC portion) for Princess Elisabeth Island. Elia Transmission Belgium has recently decided to postpone signing the contract for the HVDC equipment. The associated costs have not yet been incurred. There is therefore no reason to reject these costs. The analyses of Elia and CREG are largely similar when it comes to the costs and benefits of Princess Elisabeth Island and the impact of market conditions on the price increase. However, Elia does not share all the conclusions of the report. Elia is currently finalising its internal analysis, supported by KPMG under the guidance of the Audit Committee. These reports will enable CREG and Elia, in a joint approach, to support the authorities in their decision-making. Elia is convinced that cooperation is the best way to achieve a socially supported solution.

There was a huge market shift in recent years following the war in Ukraine. This caused an upward revision of ambitions to integrate renewable energy across Europe, which led to a huge demand for electrical equipment, creating an imbalance between supply and demand. In a short time, we went from a buyer's market to a seller's market, as also recognised by CREG in its report. We have been concerned about this price increase and have since developed internal analyses of variants. Some variants no longer meet political demand (such as the 3.5 GW and a hybrid interconnector between Belgium and England). 

The technical choices made by Elia, as referred to in the CREG report, mainly concern direct current equipment. The alternating current portion has already been tendered in accordance with applicable industry standards and technical requirements. The purpose of these choices is to provide Belgium with a reliable and robust grid infrastructure. These choices were documented and shared by Elia with stakeholders.

The costs resulting from these technical choices for the DC portion have yet to be incurred, as Elia recently decided to postpone signing the contract for this technology.

We want to spend the next few days and weeks further analysing CREG's comments and discussing them in depth with it. We aim to openly inform the government and the regulator about the technical configuration of the project and the consequences of maintaining or revising these technical choices, particularly the consequences of the technological choices mentioned in the report. This analysis is absolutely essential to understand the implications of the various technical choices.