Energy Production (i) Belgian Energy System

Chapter 3: CLEAN

Energy Production (i) Belgian Energy System

Part 1: The Belgian Energy System

The context is clear. This country’s economy is fundamentally reliant on a secure and affordable supply of energy. Until recently, our existing energy infrastructure has met those criteria rather well. Some will debate the finer points—but the average consumer or company would not. Looking ahead, however, we will need to do things differently. The key drivers of this change stem mainly from EU policy and the problems such policy is trying to address, i.e. continued liberalisation of the energy market (letting EU-wide competition improve choice, prices and the security of supply), reducing greenhouse gas emissions and investing in renewable energy capacity (to address climate change, air pollution and fossil fuel dependency). In Belgium, a number of unique factors complicate the situation further: our ageing energy infrastructure, the nuclear phase out law starting in 2015 and supposed to be fully executed by 2025, and the geographical limits to renewable energy production.

One obvious response to the energy problem is to consume less energy (translating into less import dependency, less CO2, and less money needed for new production capacity). Indeed, energy efficiency is a key policy priority for the Flemish government and it is a main component of the EU’s climate package (20% more energy efficient by 2020). This topic will be looked at in the next chapters, where we focus on energy management in the energy-intensive industries, in transport and in buildings. In this section we look at the production side of the story.

Overhauling the energy system will not be easy. In our Belgian context, there are at least four key challenges that need addressing: one, the energy market needs to function more effectively; two, the nuclear question needs to be decided; three, massive investment in renewable energy (and efficient gas-fired installations) needs to happen; and four, the electricity grid needs to be transformed. Each of these points will be discussed in turn. Firstly, however, a few facts and figures about the Belgian energy system.

The Belgian Energy System – Today versus 2020

What does the energy system look like today and how will it have changed by 2020—or rather, how should it be changed if we are to comply with the EU’s 2020 climate package? Probably the most credible word on this matter comes from the Federal Planning Bureau. It has done extensive modelling work in this area to forecast how the system would evolve under three different scenarios: a baseline scenario without the EU’s climate package, a 20/20 scenario assuming compliance with the EU’s current commitments (20% reduction in CO2, 20% of energy needs covered by renewables) and a 30/20 scenario where the EU ups its commitment to 30% reduction in CO2 emissions. Let us compare the 2005 situation with 30/20 scenario in 2020, since it is that scenario we need to strive for if we want to achieve the central climate change objective of limiting global warming to 2°C.

According the Federal Planning Bureau’s analysis, energy savings and deployment of renewable energy sources (RES) are the main responses of the energy system to the EU policy targets. Final energy demand still grows marginally (0.4% annually) but it would have grown more in the baseline scenario. Mainly this will be due to improved energy efficiency in the transport, tertiary and residential sectors. As will be seen in a later chapter, the energy-intensive industries have already achieved much of its energy efficiency potential.

The change in the energy mix is characterised mainly by increased shares of renewables and natural gas, and a decline in nuclear power (the Federal Planning Bureau assumes implementation of the nuclear phase out law). The share of RES in Gross Final Energy Demand in 2020 reaches 12.3%, just short of Belgium’s target 13%.

Demand for electricity is expected to grow by 1.3% per year on average but is likely to accelerate somewhat after 2020 as more low-carbon generation capacity becomes available (hence lowering prices compared to carbon-based energy). Power generation capacity will increase in line with demand but also to cover the variability in renewable power generation. Thus, in 2020 19% of net electricity generated is ‘green’ but in terms of installed capacity renewables represents 28% of total electricity generation capacity.