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Access Objective, transparent and regulated grid access tariffs Elia’s grid access package offers grid infrastructure, grid operation and ancillary services. Elia applies for all these services non-discriminatory, transparent and objective tariffs. In other words, the tariffs are a fair reflection of the costs that Elia incurs in supplying these services: building and maintaining grid infrastructure, operating the grid (monitoring and managing energy flows on the grid, etc.) and providing ancillary services (grid congestion management, voltage regulation, etc.).

The tariff structure applied by Elia is laid down in a Decree from the federal regulator (CREG). The Decree also stipulates that the CREG will check that the costs covered by the tariffs are reasonable.

I. The grid access tariff system: principles The main features of the grid access tariff system: • tariffs reflect the costs Elia incurs. The tariff system is set up to be transparent and non-discriminatory; • the revenue from the tariffs for services must enable Elia to ensure the efficiency of the grid; • any profit margin is calculated in advance using the rules stipulated by law; • tariffs apply for a period of four years.

To find out more about these tariff principles, please consult the brochure entitled "Elia: facilitator in the free electricity market"

II. The criteria used to determine tariffs II.1. Tariffs based on the grid access voltage level To ensure that the tariff system is consistent, users are classified into four categories: • the first category consists of grid users connected to the 380 kV, 220 kV or 150 kV network; • the second category consists of grid users connected at the transformer output to the 70 kV, 36 kV or 30 kV network; • the third category consists of grid users connected to the 70 kV, 36 kV or 30 kV network; • the fourth category consists of grid users (including distribution system operators) connected at the transformer output to the medium-voltage network (voltages less than 30 kV).

Tariffs according to the "cascading" principle

Customers connected to the 380/220/150 kV networks

Customers connected to the 70/36/30 kV networks, downstream of the transformer

Customers connected to the 70/36/30 kV networks

MV

Customers connected to the medium-voltage network, downstream of the transformer to medium voltage (15 to 6 kV)

There are specific tariffs for each of the categories, reflecting the costs associated with the services provided. These costs differ depending on the part of the grid to which the user is connected.

• a user connected to the medium-voltage grid will cause more costs than a user who is connected to the 380 kV network.

This is because the electricity taken from the medium-voltage network will follow a longer and more complex route, using an infrastructure that is more extensive and thus also more expensive; • in contrast, the electricity taken from the 380 kV network takes a shorter route through the Elia grid, and so will involve fewer costs. Therefore the tariffs applied to grid users of the first category will be inevitably lower.

Therefore, the grid-access tariffs are based on the principle of "cascading" costs from the higher voltage levels to the lower voltage levels. Exception to this are the tariffs applied to the injections into the grid. In that case the cascade principle does not apply.

II.2. "Post stamp" tariffs: uniform tariffs for each category Uniform tariffs are applied in each of the four categories. Whatever their location in relation to the grid, the tariff applied will be the same for all the users within a single category.

II.3. Preferential tariffs thanks to precise subscriptions Tariffs for using the grid are based on a "subscription" system: the grid users give Elia a prediction of their offtakes and/or injections. This system encourages users to predict their subscriptions as correctly as possible because the closer their predictions are to the actual offtakes and/or injections, the less they will have to pay.

III. Power and energy: the key values for fair tariffs III.1. Power or energy?

To make sure that they provide a fair reflection of costs, one part of the grid access tariff is power-based, while the other part of the tariff is based on energy. For power, the offtake or injection peak realized over a set period serves as the reference. For energy, the amount of electricity taken off or injected is taken into account.

III.2. Use of grid infrastructure: power-based tariffs Tariffs for the use of grid infrastructure are based on the power given in kW. It is actually this value that determines the size of the grid Elia will have to provide. The higher the power, the more the grid will potentially have to be strengthened, entailing greater investments and costs.

III.3. System management and ancillary services: tariffs based on energy Tariffs for system management and ancillary services take into account the amount of energy (given in kWh), i.e. the costs of the services depend on the amount of energy taken off from the Elia grid.

Elia supplies the following ancillary services: • reservation of primary frequency control, the reservation of the secondary control in the Belgian regulation zone, the reservation of tertiary reserve and the black- start service; • voltage and reactive power control; • congestion management; • compensation for active energy losses in the grid.

The tariff for reactive power is linked to the grid user’s right to take off a fixed amount of reactive energy from the grid. This amount equals 32.9 % of the amount of active energy taken off from the grid over the same period.

If the user goes over the fixed amount, a tariff given in €/MVArh and indicated in the valid legislation applies.

For more information on ancillary services, please consult the "Grid support" sheets.

III.4. Cost-reflective tariffs for each grid user The tariff system is such that every grid user makes a fair contribution to grid operation costs. The tariffs must provide a fair reflection of the costs borne by Elia in supplying its services to the user. In the specific case that a grid user is supplied by a "local" generating unit located at the same access point as where the user takes off energy from the grid, the net amount taken from the grid is significantly reduced, in proportion to the locally generated energy.

Elia Grid

A1 A2

Connection points A1, A2

T

Access point T

Pnet offtake = Pload - Pgeneration

Pgeneration

Pload

~

Although the net offtake from the grid is reduced, Elia has to invest as much in the grid as it would if there were no local generating units. In fact, the grid infrastructure must be able to supply the grid user’s consumption requirements even when the generating unit is unavailable. Therefore it is natural that the tariffs for supplying the grid infrastructure are based not only on the net power taken off the grid, but also the annual peak that has been reached ("additional power proportional to the annual peak"). The calculation of this peak is based on the power measured during the month concerned and the 11 previous months.

Elia offers all grid users services pertaining to system management, the reservation of primary frequency regulation, the reservation of secondary control of the balance in the Belgian regulation zone, the reservation of tertiary reserve and the black-start service as well as voltage and reactive power control, even if a given user does not take anything off the grid. Indeed, the electri- cal installations at the site with a local generating unit cannot operate without these services. That is why their tariffs are based on the concept of the “gross limited offtaken energy“. This is the amount of energy taken off by the load, after compensation between this amount and the locally generated power up to the first 25 MW. A comprehensive glossary gives accurate definitions of the various concepts in this sheet.

Offtake 40 MW

~

~

25 MW

35 MW

Offtake by load 100 MW

Injection 40 MW

Gross limited offtaken 75 MW

~

~ 35 MW Injection by local production unit 60 MW

Netting between the offtake by the load and injection by the local production unit, capped at 25 MW

Gross limited injected power 75 MW

Offtake by load 60 MW

25 MW Injection by local production unit 100 MW

Netting between the injection by the local production unit and the offtake by the load, capped at 25 MW

The tariffs of the other ancillary services (i.e. congestion management and compensation of active energy losses in the grid) use the notion of net energy taken off from the grid by the grid users.

By analogy to the gross limited offtake power there is also the concept of gross limited injected power that is taken as the basis for the tariff for "reservation of the primary frequency control, the reservation of the secondary control within the Belgian control area, the reservation of the tertiary reserve and the black start service" applied to the injections. The gross limited injected energy refers to the amount of energy injected by the production after compensation between this quantity and the local power offtake up to the first 25 MW.

III.5. Tariffs varying according to the offtake period The standard tariffs for supplying grid infrastructure and for compensating active energy losses in the grid vary according to offtake: • during peak-load hours, i.e. from Monday to Friday from 7 a.m. to 10 p.m.; • during off peak hours, i.e. from Monday to Thursday from midnight to 7 a.m. and from 10 p.m. to midnight; from Friday at 10 p.m. to Saturday at 7 a.m.; and on Sunday from 10 p.m. to midnight; • during weekend hours, i.e. from Saturday at 7 a.m. to Sunday at 10 p.m.

The tariffs also vary with the season: winter (from January to March and from October to December) and summer (from April to September).

In practice, the tariff is lower during the hours and seasons during which use of the grid is less intensive. Actually, the size of the grid is mainly influenced by the power peaks, which generally occur during seasons of intense industrial activity and peak-load hours.

Furthermore, if certain specific criteria are met, tariffs with a special "Day/Night and Weekend" formula can be applied. This formula is targeted at grid users who take more energy from the grid at night and during the weekend than during the day.

For the tariff for supplying grid infrastructures applied to injections there is no division according to the time of the injection or according to the season.

III.6. All the tariffs and a simulation available on the Elia website

IV. Legal and contractual bases A number of legal provisions regulate the tariff structure for grid access services: the Electricity Act of 29 April 1999, amended by various laws, and the CREG Decree relating to tariff methodology.

Under those legal regulations tariffs are strictly determined on the basis of a strict procedure: • Elia submits to the CREG a budgetary evaluation of its costs and its tariff proposal; • the CREG evaluates the tariff dossier. It may ask Elia to adapt certain budgetary items; • if need be, Elia submits a modified tariff proposal; • if Elia and the CREG disagree, provisional tariffs are applied.

The tariff structure for grid access in 5 key points • Tariffs reflect the costs for the services supplied by Elia.

• The tariff structure is laid down by law and regulated by the CREG. • Tariffs depend on the part of the grid to which the grid user is connected.

• Power and energy serve as the basis for calculating how much the grid user has to pay.

• The tariff system for Elia grid access services is transparent, objective and non-discriminatory.

A1-E-11.02.2012 / Non-contractual document / Editor: J. Vandermeiren, Bd de l’Empereur 20, 1000 Brussels

In a bid to be as transparent as possible, all tariffs for Elia services can be consulted at www.elia.be > Products & services. You can even simulate your costs by entering your offtake and/or injection data online in a simple Excel file.