Elia: ‘consumer won’t notice nuclear phase-out in electricity bill’
Consumers will not notice the capacity remuneration mechanism (CRM) – the government’s system to support investments in new gas power plants to compensate for the nuclear phase-out – in their electricity bills. That is what grid manager Elia has calculated. The CRM mechanism guarantees the energy supply at the lowest cost.
Elia recently published its biennial study on Belgium’s adequacy and flexibility needs for the coming decade. The study was prepared in close collaboration with different authorities from the energy sector. To ensure Belgium’s security of supply during the period 2022-2032, attention must be paid to the impact of the gradual phase-out of nuclear power, and the changes brought about by the European Green Deal.
Elia has identified three key messages: 1) there is an urgent need for new capacity, 2) there is a need for a supporting mechanism, and 3) Belgium must prepare to become a carbon-neutral society.
The study confirms the urgent need for additional domestic capacity to cope with the planned phase-out of nuclear power. Current markets will not provide the sufficient stimulus required, making a CRM the solution of choice.
In addition to tackling pressing issues in the run-up to 2025, Belgium must prepare for its transformation into a carbon-neutral society by 2050. Electrification will help decarbonize parts of society and enable flexibility to be built into the whole system.
New gas plants
Belgium is planning a nuclear phase-out by 2025. That means additional energy is needed. That is why the government decided to build two or three new gas power plants and worked out the CRM mechanism to win investors over to invest in the new energy production.
Belgium will need 3,6-gigawatt new capacity by 2025 or the equivalent of four large nuclear plants, Elia has calculated. Slightly less than estimated two years ago, when Elia expected 3,9 GW.
Electricity will not become cheaper. “On the contrary, energy prices are on the rise, but without the CRM mechanism, prices would be much higher,” explains Elia CEO Chris Peeters. “The investment mechanism guarantees lower prices and makes us less dependent on other countries. Furthermore, it opens the way to renewable energy,” adds Minister of Energy Tinne Van der Straeten (Groen).
But will there be enough electricity in the near future? What if we all switch to electric cars and heat pumps? “We could even save energy,” Elia CEO Peeters says. “As long as we don’t charge our electric cars simultaneously but in a smart way.”
The batteries of those cars could also be used for local electricity use to prevent shortages of blackouts. Smart charging, at night or periods of high availability of wind and solar energy and using the car’s battery as a backup when demand is high, could help to stabilize the grid.