Energy News December 2024

The extension of the nuclear electricity plants was all over the news

The new Belgian government faces critical decisions on power supply investments, as electricity consumption is expected to double by 2050. The coalition's energy group suggests scaling back the nuclear phase-out, extending existing reactors, and facilitating new ones. However, stalled government negotiations are hindering key energy decisions, including the fate of nuclear power. Engie cautions that altering nuclear plant closure dates could jeopardize reactor extensions. The government is searching for a buyer for the power from two reactors set to stay open longer, with interest from major players like Engie and Luminus. The European Commission has confirmed no major objections to the agreement on nuclear plant extensions.

The auction for the new offshore wind farm in the Belgian North Sea is launched together with the news of exploding prices for the required energy island and an unsuccessful Danish offshore wind park auction with unattractive conditions

The government is launching an auction round for new offshore wind farms in the Belgian North Sea. It promises to be a sharp battle between the Belgian pioneers who built the earlier parks, Belgian newcomers including Luminus and Storm, and major foreign groups such as TotalEnergies, RWE, Ørsted and EnBW.

To bring electricity ashore, an offshore outlet is needed created by an island. The cost of the Princess Elisabeth Island would be a multiple of the original estimate. Resigning energy minister Tinne Van der Straeten (Green) has asked the energy regulator Creg to intervene. The tight supply of DC infrastructure means suppliers can ask for whatever they want. Meanwhile, it is clear that Elia has already largely factored in higher costs in its grid tariffs for the 2024-2027 period. The tariffs include a cost of almost €5 billion, more than half of the additional costs for a total price of €7 billion.

At a recent auction launched by the Danish government, energy suppliers show no interest whatsoever in three new offshore wind farms, including Denmark's largest ever wind farm. The price to build a wind turbine has risen sharply, and higher interest rates have also made financing much more expensive. This makes it harder to make an offshore wind farm profitable. Moreover, there are problems in the supply chain of wind turbine builders. The auction was conditional on the Danish state holding 20 per cent of the new wind farms. In addition, potential bidders were not promised any subsidies.

Elia Transmission Belgium successfully joins PICASSO, the European secondary balancing energy exchange platform

Elia Transmission Belgium successfully joined PICASSO, the European platform for the exchange of balancing energy from Automatic Frequency Recovery Reserves (aFRR), on 26 November. By participating in this platform, European transmission system operators can exchange aFRR balancing energy. PICASSO gives them access to the cheapest aFRR balancing energy within a wider area (depending on the interconnection capacity available). Elia's access to PICASSO contributes to increasing social welfare and provides new opportunities for market players to participate in an integrated balancing energy market at European level. Access to additional quantities of balancing energy also enhances system security. Initial results show that the launch is a success, with significant volumes of balancing energy exchanges through the platform regularly resulting in lower imbalance prices.

Electricity grid tariffs rise in Flanders and Wallonia

The grid tariffs for 2025 have been published by the different regulators in Belgium. It was already known that the contribution for the electricity transmission grid will increase significantly. With the publishing of the contribution for the distribution grid, one can complete the picture for 2025.

The cost of the investment for the energy transition weighs heavily on the grid costs. These investments are required to modernize and strengthen the existing infrastructure to cope with increasing electrification, build up of new assets (batteries, renewable energy production onshore and offshore…), and the interconnection with neighbouring countries.

Below you can find an example of an industrial company with an annual consumption of 16.396 MWh and a peak capacity of 3,7 MW connected to a 26-1 kV connection in Flanders (Fluvius Zenne-Dijle) or a MT connection in Wallonia.

The following primary changes can be noted for Fluvius:

• On average an increase of 29% or 6,04 EUR/MWh

• Transmission tariff historically expressed in EUR/kWh energy has been discarded. The transmission costs are now spread over the existing DSO costs such as access power and peak power

• As a result, a bigger weight is laid upon peak based tariffs. Decreasing the energy cost from 8,53 to 4,97 EUR/MWh

This has an impact on the local advantage of intermittent production such as PV and wind turbines, but higher advantage for peak shaving through an EMS/BESS

The following primary changes can be noted for ORES:

• On average an increase of 58% or 13,43 EUR/MWh

• Invoiced month peak is now charged on the 11^th highest month peak; ignoring the first 10 highest peaks of the month

• Peak reduction factor applied on year and month peak is being reduced the upcoming year with a linear reduction factor of 16,67% until 2030 when it reaches 0

Both energy and peak related cost see an increase.

For more information or to verify the impact on your situation, don’t hesitate to contact one of our business consultants. Lowering your capacity or reducing your consumption can minimize the effect of the rising grid tariffs.