Regulation of electricity utilities – power generation

Authorisation to construct and operate generation facilities

What authorisations are required to construct and operate generation facilities?

A federal production licence must be issued by the federal Energy Minister, subject to a prior advice from the federal Commission for the Regulation of Electricity and Gas (CREG), for each construction of a new generation facility, as well as the reconstruction or modification of an existing facility not subject to an individual licence, resulting in an increase of the net capacity by more than 25MWe.

By way of exception, nuclear generation units are excluded from this requirement, as they can no longer be the subject of any permit or licence in Belgium (ie, subject to a change in law, no new nuclear generation units can be constructed in Belgium).

The construction and operation of generation facilities on land is subject to regional land planning and environmental law and regulations, and may therefore require a building and an environmental permit, depending on the nature of the installations. For offshore constructions (including cables for connection to the onshore transmission system), additional permits and authorisations may be required under federal law.

Grid connection policies

What are the policies with respect to connection of generation to the transmission grid?

In accordance with EU law, grid users (including generators) have a right to non-discriminatory grid access, subject to their: compliance with the applicable (technical) requirements; payment of the applicable, pre-approved tariffs; and entering into industry standard regulated contracts with the relevant network operator(s) (see question 10).

Besides the tariffs and contractual framework, grid connection and access are covered by several grid codes at national and EU level.

Priority grid access may apply in certain cases for certain types of (renewable) generation. Under future EU legislation (the ‘Clean Energy Package’), the possibilities of priority grid access are likely to be reduced for new installations.

The network operators are required to keep commercially sensitive information obtained from grid users confidential.

Specific permits may be required and compensation can be obtained for costs incurred for the connection of offshore (wind) generation units to the transmission grid. Specific rules also apply to private and direct lines, as well as closed industrial networks and closed distribution systems to which generators may connect, in order to ensure the viability of the public grid as well as the users’ right to grid access.

Grid connection and access can be refused by the network operators in accordance with the applicable network codes if technically unfeasible or economically unviable, or to ensure the secure operation and integrity of the grid.

Alternative energy sources

Does government policy or legislation encourage power generation based on alternative energy sources such as renewable energies or combined heat and power?

Except for power production in the North Sea, renewable energy sources are a regional competence. Government policy and legislation encouraging the use of alternative energy sources are therefore decided on a federal (offshore) and a regional level and may differ between the three Belgian regions.

As a general rule, all three regions as well as the federal state (regarding offshore) have policies and a legal framework in place to support renewable energy generation. All of these include a system of green certificates (either federal or regional) that are issued for each kWh of power produced, which can subsequently be sold either on the market (demand for certificates is driven by quota obligations for suppliers or grid users) or to the TSO or DSO at a certain minimum price.

Offshore renewable generation is supported through the federal system of green certificates. Brussels promotes the use of renewable energy sources by assimilating the federal system of green certificates combined with a quota obligation, as well as through net-metering for small producers and investment aid for certain companies and projects. Flanders has its own system of green certificates and combined heat and power (CHP) certificates combined with quota obligations in place, together with net-metering for small-scale generation and ecological premiums for environmentally friendly investments. Wallonia promotes renewable generation though various means, including the federal system of green certificates and quota obligations, investment aid and specific support schemes for certain technologies.

Climate change

What impact will government policy on climate change have on the types of resources that are used to meet electricity demand and on the cost and amount of power that is consumed?

Belgium is committed to the Paris climate agreement. In 2015, during the Paris negotiations, the different regions and the federal state reached a Belgian internal climate agreement, allocating the efforts to be made by each region and the federal state towards reaching Belgium’s overall climate targets.

Despite these commitments and in line with public opinion, policy has recently seen a shift towards reducing subsidies for renewable power generation (eg, cutting subsidies for biomass, photovoltaic generation and offshore wind). This shift may render the achievement of the Belgian climate targets more challenging.

In view of the climate targets, nuclear power, despite its gradual phase-out, will continue to play an important role in the Belgian energy mix at least until 2025. Some factions already argue today that climate policy will make the extension of the life duration of the nuclear units beyond 2025 inevitable.

At the same time, climate targets are likely to push the different Belgian governments towards policies promoting energy efficiency measures, distributed generation and small-scale renewable production that require fewer subsidies (such as heat boilers, which have seen prices drop drastically over recent years).

Storage

Does the regulatory framework support electricity storage including research and development of storage solutions?

The current regulatory framework in Belgium is generally silent about electric-power storage, which (unlike gas storage) is not considered a task belonging to the legal monopoly of the network operators.

Large-scale (hydro) storage facilities exist in Belgium, although the law does not provide for any specific regulatory incentives.

Plans for a large-scale tidal storage facility in the North Sea (‘atoll’), to be constructed by the TSO and funded through the transmission tariffs, have been put on hold.

Government policy

Does government policy encourage or discourage development of new nuclear power plants? How?

Under the current state of the legislation, no new nuclear power generation units can be constructed in Belgium.

Subject to any policy changes, all seven existing nuclear units in Belgium are subject to a gradual phase-out by 2025.