1. What electricity storage projects have been commissioned in your jurisdiction to date?
There are currently three operational pumped-hydro storage projects in Belgium with a combined capacity of over 1.3 GW. These projects principally provide for time-shifted electricity supply capacity and spinning reserve capacity and, whilst originally developed by the then state-owned electricity company, are now owned by commercial companies (Electrabel and Lampiris).
2. What electricity storage projects are anticipated in your jurisdiction in coming years?
The need for storage capacity in Belgium is expected to increase from 7 GW to 12 GW in 2020.
The main energy storage project in Belgium is the construction and operation of an offshore “energy atoll” (essentially a manmade offshore pumped-storage facility), for which the Electricity Act has been modified in 2014 (see below), in order to support offshore wind-generated electricity production.
The concession for the construction and the operation of this energy atoll was meant to be awarded to a consortium named “iLand” (comprising Deme, Jan De Nul, Electrabel, PMV, SRIW and Socofe), but is currently on hold, following a report of the federal regulator for electricity and gas (“CREG”) in April 2015 that questioned the profitability of the project.
A second large-scale energy storage project is the 600 MW extension of the existing capacity of the pumped hydro Coo project (“Coo 3”). The current operator of Coo 1 and 2, Electrabel, intends to seek one or several partners for this project, which requires legislative and regulatory changes to ensure its profitability.
3. Is there any specific legislation/regulation or programme that relates to energy storage in your jurisdiction?
In 2014 a specific provision was introduced in the Federal Act of 29 April 1999 to facilitate the awarding of offshore concessions for the construction and operation of pumped-hydro storage projects.
Other changes are required to ensure the economic feasibility of large-scale energy storage projects, especially the tariffs and tax regimes, which currently apply twice on such facilities, both on their consumption and production activities:
- Exemption from federal taxes and additional costs;
- Adoption of a tailor-made tariff regime;
- Modification of the grid losses compensation mechanism (380/220/150 kV); and
- Exemption from the green certificates obligation for the offtake of electricity.
4. Please give examples of challenges facing energy storage projects in your jurisdiction and how current projects have overcome these challenges.
CREG issued a report on the profitability of energy storage in Belgium in April 2015. This report identified the following challenges and barriers for the development of energy storage in Belgium:
- Tariffs, taxes, etc. – storage facilities with direct connection to the grid face high tariffs, taxes and obligations that prevent their development. Conversely, storage facilities directly connected to production capacities and/or self-producers are able to avoid such tariffs.
- Compatibility with ancillary services and BELPEX markets – due to the limited capacity of storage facilities, the range of services to be offered in the context of ancillary services on the BELPEX market remains limited.
- Competitiveness with other ancillary services – storage facilities face additional costs as they are subject to taxes and tariffs in the context of their “consumption” of electricity and therefore find it difficult to compete with more conventional providers of ancillary services.
The CREG report includes several recommendations to the federal and regional governments in order to tackle these challenges and barriers. None of these recommendations have been implemented so far.
The national TSO, Elia, conducted and published in April 2016 a study examining the adequacy of electricity generation compared with demand, and assessing the need for flexibility in the electricity system. This study, covering the period from 2017 to 2027, is in essence a quantitative analysis of these issues and addresses, amongst several topics, the issue of electricity storage.
5. What are the main entities in the electricity sector and what are their roles or expected roles in relation to energy storage?
CREG and the regional regulators (VREG, CWAPE and BRUGEL) play an important role in identifying and assessing the feasibility for the development of energy storage projects, and in issuing recommendations to their respective governments to adopt the necessary legislative and regulatory improvements.
Elia procures various ancillary services that provide key revenue streams for energy storage. Local DSOs may also follow Elia in this regard.
Electricity generators and suppliers are important players as they have direct operational and commercial interests in energy storage projects. Other players, such as public finance structures, will also be part of such projects.