Sustainable energy The RUE action plan: grants for primary-energy savings in Flanders Companies in the Flemish Region that are connected to Elia networks of up to 70 kV can apply to Elia for grants to invest in rationalising their use of energy. The amount of the grant they receive is based on a specific percentage of the total investment. The amount is chosen based on how long it will take to recover the investment (payback time).
I. The RUE action plan for Flanders: basic principles Policies to combat global warming have seen various governments taking action to promote rational use of energy. The Flemish government, for instance, decided to impose a general obligation on distribution system operators to make energy savings. DSOs have to ensure that customers connected to their system take appropriate measures to cut their energy consumption. The resultant energy savings must cover a set percentage of the overall reduction in energy consumption that is imposed on system operators. The objective for 2008 is 1.5% of primary energy per kWh supplied to non-residential customers.
I.1. Action plan submitted to the Flemish Energy Agency To meet these obligations, each year Elia has to prepare an action plan that it submits to the Flemish Energy Agency (‘Vlaams Energieagentschap’). Subsequently it also notifies this agency of the total savings made on the basis of this action plan. In doing so, it does not, however, give Elia customers’ individual information. If the plan does not lead to Elia meeting the objectives set in the decree, Elia has to pay an administrative fine.
I.2. Grants to support energy savings Under Elia’s action plan, grants are provided to customers connected to the networks of up to 70 kV that it operates in the Flemish Region. The aim of the grants is to support customers’ plans for making primary-energy savings. To be eligible, the measures must be feasible and realistic, from an energy and an economic perspective.
I.3. A key factor: payback time There is no benchmark consumption value for estimating the energy gain when energy-saving measures are considered to have been achieved in newly built facilities. In these cases, therefore, the savings made in relation to standard consumption are used as the benchmark for estimating the impact of the proposed measures. Likewise, if a replacement measure is proposed, the ‘life expectancy’ of the current facilities has to be longer than the payback time, bearing in mind that: • the payback time is a benchmark value obtained by dividing the costs of the proposed investment by the estimated energy gain; • the investment costs include direct external costs (for example costs included in the bill for the investment); • the energy gain may be estimated on the basis of: • the prices that the customer has paid for its energy; • the energy prices specified in the general terms and conditions of the grant application. The size of a grant is directly linked to the payback time for the proposed measures. On the basis of this criterion, the measures are divided up into three categories: Payback time
Grant (as a percentage of investment costs)
Category A
1-2 years
10%
Category B
2-5 years
(10% of payback time in years) – 10%
Category C
5-10 years
40%
In other words, there is a linear rise in the size of grants, in proportion to the payback time.
I.4. Key criteria for obtaining grants Certain criteria have to be met for obtaining grants: • at the time of the grant application the investment must not have been made previously, i.e. the applicant must not have already ordered the activities covered by the application; • grants are limited to € 200,000 per customer per year;
• as there is a limited overall budget available for all grant applications, the criterion of profitability is considered when deciding on whether to award a grant; • the energy-saving measures must be implemented no later than June of year N+2, where N is the year when the application was submitted; • grants are not awarded if energy-saving measures have already been given other means of support such as cogeneration certificates; • Elia gives priority to projects with a payback time of two to five years.
I.5. Cost of preliminary study used as down-payment Elia may fund a study that assesses the feasibility of the energy-saving measures. This support, worth up to € 20,000, serves as a down-payment on the total amount subsequently awarded to the customer, provided that: • the feasibility study is carried out by a third party (i.e. with no relation to the customer or Elia); • Elia is informed in advance of the cost, timing and content of the study; • Elia has the right to fully examine the content of the study; • any applicable measures are implemented no later than June of year N+2, where N is the year when the application was submitted. If, after the study has been carried out, the applicant for the study decides not to implement the measures examined and this decision is justified, it does not have to reimburse the grant awarded by Elia as a down-payment.
II. How to submit a grant application A grant application is submitted using the documents that can be freely downloaded from www.elia.be ("Products & services" section). Elia submits its customers’ applications to an independent body. Additional questions may be asked in this phase. Once the file is complete and has been finalised, Elia makes an approval decision – a decision that sets a provisional amount for the grant. After implementing the funded measures, the customer draws up a report which presents the implementation results and sends it to Elia, accompanied by proof of the customer’s expenditure. Elia may carry out on-site inspections as part of the process of analysing the file. Once all these steps have been completed, Elia makes a final assessment of the amount of the grant and pays the final amount to the customer. This amount is largely based on the savings made and the operational expenses incurred in carrying out the project.
III. Benefits of the RUE action plan The positive impact of the RUE action plan’s energy-saving measures is felt in a number of areas: • by investing in energy-saving measures, the Elia customer is doing its bit to meet the overall objective of combating global warming. The financial support provided by Elia gives the customer the chance to put in place an ecological policy that will also have an economic impact on its activities; • a grant means that the customer can launch projects with longer payback times; • from an administrative point of view, the process for obtaining a grant is very simple, due to a quick approval procedure based on objective criteria; • the applicant is informed of the amount of a grant before measures are put in place.
IV. Legal and contractual basis To obtain a grant, the customer must be connected to the Elia grid at the time of its grant application. The access point must be in Flanders and the voltage level must not exceed 70 kV. The system operators’ duty to achieve primary-energy savings arises from the Flemish Government Decree of 2 March 2007 "inzake de openbare dienstverplichtingen ter bevordering van het rationeel energiegebruik" (on public service obligations to promote the rational use of energy).
The RUE action plan in 5 key points • The objective of the RUE action plan is to allow Elia to meet the primary-energy savings thresholds set by the Flemish Region, by working together with those of its customers in Flanders that are connected to a network with a voltage level of less than 70 kV. • Elia awards grants to the customers mentioned above in order to support energy-saving measures. The grants may amount to as much as € 200,000 per customer per year and enable customers to put in place ecological measures while boosting their profitability. • The proposed measures’ payback time and profitability play an important role in the decision on whether to provide a grant. • A preliminary study that assesses the impact of the measures may also be funded by Elia as a downpayment on the final grant.
D1-E-23.01.08 / Non-contractual document / Editor: J. Vandermeiren, Bd de l’Empereur 20, 1000 Brussels
• The procedure for obtaining a grant is quick and simple.