Elia, the Belgian high-voltage network operator, is planning massive investments to be made over the next ten years. These investments are listed in its “Federal Development Plan 2024-2034″, which must still receive the approval of the Minister of Energy, Tinne Van der Straeten (Groen). A decision on this should be made in April.
At the same time, Elia is currently carrying out a public consultation regarding its “tariff proposal 2024-2027″. What is this consultation regarding? As a reminder, the investments made by Elia are financed via the electricity bills of consumers, households and businesses. The manager of the high-voltage network has therefore assessed the money it will have to collect, via electricity bills, over the period 2024-2027. And this, on condition that his “Federal Development Plan” is politically validated, next April.
Elia anticipates a sharp increase in its costs for the period 2024-2027. According to the document submitted for public consultation, these should increase from 760 million euros per year over the period 2020-2023 to 1.350 billion euros per year over the period 2024-2027. The costs billed to consumers should therefore follow this trend, and thus increase by approximately 80%.
New wind turbines in the North Sea
How can these massive investments be explained? The federal government has decided to significantly increase the wind capacity installed in the North Sea. While the first zone displays a power of 2300 MW, the objective is to add 3500 MW via the future second zone, called Princess Elisabeth. However, Elia will have to invest in the electrical cables needed to connect this second zone to the terrestrial electrical grid. It should be noted that the wind turbines in the Princess Elisabeth area will be connected to the future energy island, which itself will be connected to the terrestrial network.
In addition, the Belgian electricity network is currently not able to accommodate the production of future offshore wind turbines. Elia therefore plans to increase the capacity for electricity transmission from the west to the east of Belgium. This is the objective of the Ventilus projects, in the north of the country, and the “Boucle du Hainaut”, in the south of the country. The increase in the costs claimed by Elia is also explained by the financing of a large part of these two projects.
Finally, Elia is planning various reinforcements to the network, in particular to accommodate the new capacities that will arrive as part of the phase-out of nuclear power (gas-fired power stations, etc.).
Six hundred people to hire
In total, Elia plans to invest 6.5 billion euros in new infrastructure over the 2024-2027 tariff period. The high-voltage network manager also plans to hire 600 people over the period, in addition to the 1,500 employees in place in 2023.
What impact might these investments have on electricity bills? Currently, a household pays around 42 euros per year (excl. VAT) to finance Elia. We might therefore approach 80 euros per year, during the period 2024-2027. For a company that consumes a lot of electricity (100 GWh per year), we might go from 541,000 euros to around 1 million euros per year.
It should also be noted that other investments will arrive following 2027. There is the Nautilus project, a second electrical interconnection between Belgium and the United Kingdom, for which the major part of the investment might be financed following 2027. There is also the Triton Link project, the aim of which is to connect Belgium to Denmark. In short, investments will not stop following 2027.
The Minister will have the last word
The Creg, the sector regulator, will have to approve the tariffs charged by Elia to consumers for the period 2024-2027. However, if Elia’s development plan is politically validated next April, the Creg will not be able to oppose the increase in tariffs requested by Elia. At most, the regulator will be able to reject costs that it deems unreasonable.
The 1,000-point question remains: are these investments proposed by Elia essential? In a notice published last year, the Creg had asked the network manager to explain, in more detail, why each proposed investment was necessary. According to the regulator, Elia must be more transparent in terms of the cost-benefit studies it carries out. Nevertheless, the Creg did not say that the investments proposed by Elia were useless.
Still, the plan proposed by Elia makes the sector cringe. Indeed, massive electricity import capacities do not guarantee Belgium its security of supply, if there is no electricity available abroad.
But, for Elia, these interconnections with foreign countries serve, above all, to have access to cheap carbon-free electricity. Faced with people who are skeptical of the intermittent nature of renewable energies, the network manager advocates a “paradigm shift”, “aiming for electricity consumption to adapt more to the availability of electricity production”. In short, consume when it is windy or sunny. At home or abroad.
A 50% increase in electricity consumption
According to Elia, electrification “Massification of our industries, our mobility and our heating systems will play a major role in the success of the energy transition”. The manager of the high-voltage network also anticipates a 50% increase in Belgian electricity consumption by the start of the next decade. According to Elia, this justifies the massive investments it is proposing.
Furthermore, the extension of nuclear power would not “not questioning the need to deploy renewable solutions over the next decade”. The network operator nevertheless recognizes that Belgium will have to rely on renewable electricity “from outside our borders”.
