REQUIRED NEW CAPACITY* TO ENSURE BELGIUM’S SECURITY OF SUPPLY AFTER 2025

Short-term: 2025-2026

This study reconfirms the conclusions of our previous study that related to Belgium’s short-term adequacy needs during the winter periods of 2025-2026 and 2026-2027.

The first Y-4 CRM auction (held in October 2021) for the winter of 2025-26 contracted new capacity amounting to 1,700 MW (100% available), including two new combined-cycle gas turbines (CCGT). For this delivery period, 2 GW of new capacity still needs to be covered, requiring short-term measures to be undertaken (see short-term measures on page 14).

Long-term: 2030-2032

Between 2030 and 2032, the capacity gap will stabilise thanks to the build-out of RES and the construction of new hybrid interconnectors that link Belgium to the UK and Denmark** respectively.

In addition to the further development of onshore RES, the second wave of offshore wind in the Belgian Princess Elisabeth Zone will be realised. Moreover, two new hybrid interconnectors (Nautilus with the UK and TritonLink with Denmark) can be built at around the same time**.

The combined contribution of additional RES supplies and direct connections to partner countries which produce renewable energy surpluses, will lead the capacity gap to stabilise up until 2032. Important measures will still be required during this period to ensure the timely build-out of RES and grid infrastructure (see medium-term measures on page 15).

The graph above depicts how Belgium’s capacity needs will develop over the next ten years, alongside measures which could be adopted to mitigate these. These needs and associated measures can be split across several phases, as described on page 13.

EU-SAFE

Given Belgium’s high dependence on imports, any event happening abroad will have a significant impact on its adequacy requirements. In this study, we therefore take into account several sensitivities like the reduced availability of France’s nuclear fleet, the possible delayed deployment of grid infrastructure abroad or risks of drought that could lead to low levels of hydroelectric production in Europe.

Adopting a prudential approach, Elia recommends the use of the EU-SAFE scenario as a reference for maintaining Belgium’s security of supply. This scenario represents the sensitivity of a reduced availability of France’s nuclear fleet.

Last year, following the outbreak of Russia’s war in Ukraine and the energy crisis, the Belgian Federal Government decided to follow the EU-SAFE approach when defining the most recent CRM scenario. This decision has resulted in additional capacity needing to be available from 2025 onwards (see short-term measures on page 14).

It is important to note that this adequacy and flexibility study is not a CRM calibration report and does not aim to calculate future auction parameters.

Medium-term: 2027-2029

From 2027 onwards, the expected spread of electrification across the mobility, heating and industrial sectors will create additional capacity needs that will be filled via the existing CRM. This gap will partially be mitigated by increasing flexibility in the system.

These new capacity needs will increase by 700 MW on a yearly basis up until 2029, which can mainly be attributed to the further electrification of the energy system.

Due to the flexible nature of these new electrical demand appliances, the increase in capacity requirements can be partially mitigated, as depicted in the graph. Specific medium-term actions will, however, be required to allow supply to keep pace with the growing demand and to unlock flexibility (see medium-term measures on page 15).

Beyond 2033

From 2033 onwards, the capacity gap will increase once more as a result of the continued electrification of the system. Fortunately, by taking action today, these future needs can be anticipated and addressed (see long-term measures on page 17).

EQUAL ATTENTION MUST BE PAID TO SHORT-, MEDIUM- AND LONG-TERM MEASURES

In order to ensure that the energy transition is successfully realised in an efficient manner, a number of short-, medium- and long-term measures need to be implemented, as outlined below. Each of these must be addressed simultaneously; if they are not, Belgium will be carried from one crisis period to another.

SHORT-TERM MEASURES

Urgent decision needs to be taken regarding a FLEX-LTO of two belgian nuclear units

Following Russia’s war in Ukraine and the energy crisis, the Belgian Federal Government decided to adopt the EU-SAFE scenario as a reference for maintaining security of supply. This has resulted in additional capacity needs emerging from 2025 onwards. To compensate for the lower level of availability of France’s nuclear power plants, the Belgian Government decided in March 2022 to extend the lives of two Belgian nuclear units by 10 years.

After the government’s decision to switch to the EU-SAFE scenario, developing enough new capacity to be available during the winter periods from 2025-26 onwards was no longer realistic. The latest information regarding the potential development of new demand side response and large-scale batteries suggests that even if these are fully harnessed, a significant shortfall will be encountered. Cancelling the announced closure of existing gas-fired capacities will not fill the gap either. Moreover, the time that remains between now and 2025 is too short for new generation assets to be built.

This leads to the conclusion that the Y-1 CRM auction, which will be held in 2024 for the 2025-26 delivery year, will most probably not be able to fill the remaining gap without other solutions being activated. To maintain Belgium’s security of supply, therefore, the solution lies in the implementation of the ‘Flex-LTO’ scenario.

While current negotiations involving the Belgian authorities and ENGIE are focused on the ten-year extension of the lives of two nuclear units (Tihange 3 and Doel 4) from the winter of 2026-27 onwards, this extension can be implemented in such a way that the two nuclear units remain available during winter periods from 2025-26 onwards (Flex-LTO).

If the flexible long-term operation (‘Flex-LTO’) of two of Belgium’s nuclear units is not pursued, additional exceptional measures will have to be considered. However, these will be insufficient, complex and costly – and thus should be avoided.

MEDIUM-TERM MEASURES

Need for 2.9 GW by 2029

If the lifetime extension of Doel 4 and Tihange 3 and the new capacities contracted under the first Y-4 CRM auction are taken into account, by 2029, about 2.9 GW of additional new capacities will be needed to keep the system adequate. This volume can be filled by different technologies, such as additional demand response (on top of the already assumed industrial and end user flexibility), large-scale batteries, or other thermal capacities.

The planned development of RES and associated infrastructure will contribute to reducing the work associated with the development of alternative supply means. As part of the assumptions in this study, and in line with Belgium’s ambitions, renewable energy development will more than double towards the end of the period under consideration. This covers the timely development of the second wave of offshore wind in the Princess Elisabeth Zone, which will require the completion of key projects along Belgium’s backbone and projects like Ventilus and Boucle du Hainaut.

However, this alone will not be sufficient for ensuring the country’s security of supply. The simulations in this study demonstrate that the need for additional capacity will steadily increase in the lead-up to 2029, even when existing fossil fuel capacities remain in the system. While this increasing need was apparent in our previous study, based on increased electrification targets, this need is developing five years earlier than anticipated.

Unlocking new flexibility

Facilitating and harnessing end user flexibility could generate cost savings of more than 200 million Euro per year by 2034 (linked to adequacy and balancing capacity procurement costs).

New sources of flexibility, such as demand side management, need to be fully unlocked as soon as possible in order to ensure the energy transition can be efficiently realised. These will reduce additional capacity needs linked to the increasing demand for electricity. Additionally, flexibility will also reduce the need for expensive balancing capacity to manage unexpected variations in wind and solar generation.

To fully harness the benefits of an electrified society, enablers need to be quickly rolled out. Besides establishing a new market framework and engaging consumers, additional measures are needed in relation to the deployment of metering infrastructure, the standardisation of communication protocols, the optimisation of devices (including their capacity for remote access), and the interoperability of equipment from different vendors. Elia is investigating barriers and solutions to these which it will outline in its upcoming viewpoint, which will be published in November 2023.

Delays in rolling out these enablers will reduce the volume of fit and viable devices that can be sold on the market; in turn, this will increase the need for typically very costly and time-consuming post-sale refurbishments to be undertaken. The electrification of industrial processes could also deliver important opportunities linked to flexibility, especially at times of scarcity.

Based on extensive discussions with industry, specific assumptions regarding the potential flexibility of different types of newly electrified processes and appliances were adopted for this study. The resulting benefits in terms of a reduction in the need for new capacity in the Belgian system are very significant.

Implementing such flexibility will come with several challenges. Setting up a dialogue with all involved partners in order to assess the implications, benefits and barriers to unlocking this flexibility in the industrial sector is essential.

Prompt realisation of grid infrastructure

The timely commissioning of the Princes Elisabeth Zone and additional interconnectors like Nautilus (BE-UK) and TritonLink (BE-DK) will ensure that Belgium’s need for capacity between 2029 and 2033 remains stable while the level of consumption rises. If these projects are delayed, the country’s need for new capacity will continue to rise after 2029, requiring additional investments in generation assets to be made.

The increasing electrification of demand requires distribution and transmission grids to be strengthened and expanded. This needs to be planned for well in advance, since the development of infrastructure has a significantly longer lead time than industrial projects do.

The timely realisation of the HTLS upgrades (reinforcement of the Belgian backbone) and the Ventilus and Boucle Du Hainaut projects is a precondition for enabling large-scale industrial electrification in Belgium, as well as for creating grid hosting capacity for local needs. Additionally, both Ventilus and Boucle du Hainaut are essential for transporting the renewable energy collected offshore to consumers on the Belgian mainland.

The CRM mechanism must be developed further to manage future challenges

In addition to the unlocking of flexibility and the build-out of RES and associated grid infrastructure, the CRM was implemented by the government to safeguard the Belgian system’s adequacy. Its aim is to provide a stable investment framework for making sure that sufficient capacity will be available in time in the system.

The CRM is a mechanism that, through Y-4 and Y-1 auctions, aims to enable the required volume of capacity to be contracted for a specific delivery year. The calibration process, which is fully governed by national and European regulations, involves the volume in CRM auctions (system sizing) being determined on the basis of one selected ‘reference’ scenario.

The CRM mechanism must therefore be subject to course corrections, given how fast the context is evolving. Electrification is spreading across society both earlier and at a faster speed. As a result, increasing levels of new capacity (DSM, storage or generation) must be developed in the system at a fast(er) pace. The lead times for developing such new capacities are often longer than one year. In such a dynamic and volatile context, it is important that the CRM framework be further developed so that it can - by design - adapt to new circumstances and deliver a sufficient level of certainty (well-ahead of time) regarding the timely delivery of new capacity and can strengthen the level playing field between technologies.

Managing periods of excess energy

Additional work will be needed to manage periods when there is an excess of RES infeed by either decreasing production or increasing consumption (downward flexibility). The flexible operation of wind and solar resources is part of the solution to this.

The development of storage and implementation of an improved market design, which stimulates demand to consume more during periods of high renewable infeed and hence low or negative electricity prices, are important to make sure that the generation of renewables is used in the most efficient way possible.

Nevertheless, given the ambitions regarding renewables, more and more periods will occur during which the infeed of renewable energy exceeds demand, which could lead to difficulties when trying to manage positive imbalances in the system. These difficulties will be particularly acute during the spring and summer months, when high levels of solar generation occur simultaneously in Belgium and its neighbouring countries, making it difficult to ‘export’ excess energy. Therefore, it is important to explore how to make sure that (newly installed) solar generation capacity can reduce infeed in such situations (by reacting to price signals, for example).

LONG-TERM MEASURES

The biggest changes needed to deliver a carbon-neutral energy system in Belgium still lie ahead of us. Setting out ambitious goals is necessary, but not sufficient, for rallying all involved parties behind a common objective. These goals should be paired with concrete action plans, that will in turn require cooperation across all government levels and regions.

Realising offshore wind ambitions in the North Sea will deliver great benefits for Belgium

It is clear that the on- and offshore domestic resources that Belgium holds should be used to their maximum first. Actions aimed at extending the country’s installed offshore wind capacity so that it reaches 5.8 GW are well underway. Furthermore, over the next few years, much planning and designing must go into ensuring that up to 8 GW of capacity can be installed in the Belgian North Sea. Elia is committed to meeting this goal alongside all involved parties.

However, harvesting Belgium’s domestic RES alone will not suffice. The country needs to forge partnerships with countries that have a surplus of renewable potential; this will extend its access to renewables. Such cooperations have been initiated by the Belgian Government over the past few months via agreements concluded with other countries. As a TSO, Elia will continue to work on technical and economic feasibility studies with its counterparts abroad, so supporting informed decisions to be taken in future; Elia expects the Belgian Government to continue this work at a political level.

Investigate additional interconnectors with countries that have a decorrelated generation surplus

On top of the integration of Europe’s energy markets, Belgium needs to investigate the development of agreements and interconnectors with countries that generate a surplus of electricity and have a de-correlated electricity supply. This would provide Belgium with a cost-effective addition to the building of carbon-neutral generation assets and will complement its limited domestic RES potential, providing opportunities to increase Belgium’s RES-E share in the long term.

Anticipate the further evolution of the generation fleet

In order for Belgium to be prepared for the period following 2035, concrete and integrated long-term energy policy measures should be established both on the supply and demand sides.

It is important to note that the need for additional capacity in Belgium calculated in this study assumes that all currently existing capacities in Belgium will remain online. Given that these assets are ageing, and that some of them will soon need to be refurbished, important investments will be required to keep them going or replace them. The CRM will ensure the economic viability of the required investments.

Similarly, the introduction of a decreasing trajectory of CO2 thresholds will phase out the most polluting units from the Belgian system. However, care should be taken when setting such thresholds to enable replacement capacities to keep up with the pace of change. Rules that still enable the (exclusive) usage of older technologies at times of near scarcity will be desirable for the Belgian system, particularly over the next decade (when supply margins will be very tight).