Energy Island may cost €7 billion instead of €2 billion

The cost of the Princess Elisabeth energy island, an artificial island off the Belgian coast that will be used by the power grid operator Elia, will probably amount to 7 billion euros, a multiple of the 2,2 billion that was initially estimated.

Princess Elisabeth Island will become an energy hub for cables to neighboring countries and new offshore wind farms in the North Sea. It will be a connection point for three offshore wind farms to be built by 2030 and new submarine cables to the United Kingdom or other North Sea countries.

Cost explosion

Dredging companies DEME and Jan De Nul are building the island, but the project now threatens to be significantly more expensive than expected. In May, the federal energy watchdog CREG wrote to Energy Minister Tinne Van der Straeten about a cost explosion for the project.

During the tender two years ago, the shell of the island, the cable infrastructure, and onshore connections were estimated at around 2 billion euros. In the meantime, the investment budget is expected to increase to 7 billion euros.

‘Essential infrastructure’

The expected increase is bad news for power consumers in Belgium because, since the energy island is considered ‘essential infrastructure’, Elia has been allowed to pass on the costs to users, i.e., families and companies, for years.

From next year, the rates for an average household will increase from 40 to 80 euros per year, plus VAT. For the energy-intensive industry, which uses a lot of electricity, this can amount to millions of euros. Rising costs may drive away heavy industry. Due to heavy investments, Elia’s rates will double from 2025 compared to previous years.

‘Most efficient and least expensive’

A few years ago, questions arose about whether constructing an island—a technological world first that our country was happy to showcase—was a good idea. Elia argued at the time that an island was the “most efficient and least expensive” option.

The energy island is just one of Elia’s many investment projects. Others include developing the Ventilus and Boucle du Hainaut high-voltage lines. So, what if they all turn out to be significantly more expensive than planned..?