2 minute read
Legal disputes and liabilities
Other risk mitigation measures include being involved in the design of public service obligation mechanisms aiming to support the development of renewable energy. Once these mechanisms are in place, performing good forecasts on end-user consumption, RES-infeed, market prices, the expected number of sales of green certificates at a guaranteed minimum price, as well as reporting and communicating issues to governments and regulators can contribute to keeping a good balance.
Further information
With the advent of Belgian laws and regulations governing decentralized or renewable energy generation, notably via photovoltaic solar panels and wind turbines, the federal and regional governments organized the issuance of so-called ‘green certificates’ (GC), which are used as a financial support mechanism for renewable energy. The first vague of offshore wind turbine connections have been finalized in the North Sea in the course of 2020 and hint towards a potential growth once MOGII has been approved, generating green certificates to be sold to ELIA TRANSMISSION BELGIUM. This offshore green certificate public service obligation generates an increasingly large cash outflow, compensated by an equivalent cash inflow resulting from an increasing tariff to be approved by the government in the coming years.
In terms of the regional public service obligations, a historical imbalance exists since a few years but a gradual decline of this imbalance is expected to happen in the future.
The high tariff for public service obligations for financing the support measures for renewable energy in Wallonia, which is established to cover the cost of selling green certificates to ELIA TRANSMISSION BELGIUM, was completed in late 2017 by a new green certificate temporization mechanism. In this context, the Walloon Region is entitled to buy appropriate quantities of GC from ELIA TRANSMISSION BELGIUM and to resell these GC to the market in a few years.
In the perspective to finance the further negative balance between the actual tariff of 13.8159 €/MWh and the cost of GC sales to ELIA TRANSMISSION BELGIUM in 2021, a new temporization operation is probably still necessary in 2021. As from 2022, the GC sales to ELIA TRANSMISSION BELGIUM should start declining and so limiting the risk on further financial imbalance on the Walloon GC public service Obligation. In the same time, the reservation mechanism by Solar Chest will stop by end of June 2022.
For what concerns the offshore green certificates public service obligation, the existing legal rules foresee that this lack of funding is addressed by an evolution in tariffs, with a delay of about 2 years. The tariff for 2021 has been approved by the Minister of Energy.
As a logical result of the response defined to adequacy risks described in the regulatory & risk sections, the financing mechanism of CRM remains to be finalized, as balanced as possible.
2.3.3 Legal disputes & liabilities
The outcome of legal disputes and lawsuits may negatively affect the business operations and/ or the financial results.
