Belgian energy grid company Fluvius expects to invest approximately €200 million more in its medium-voltage networks over the next few years, as the industry is electrifying faster than anticipated.
Fluvius expects companies to cause more peak loads than previously thought, as they are switching more quickly from fossil fuels to electricity in their production processes, primarily using electric boilers.
As a result, the grid operator expects to have to reinforce or renew a total of 7,500 kilometers of medium-voltage cables by 2032. Fluvius previously assumed 5,500 kilometers.
Slower transition on the private market
The grid operator, therefore, expects to invest approximately 200 million euros less in low-voltage networks and distribution cabins, of which 30,000 kilometers and 18,000 kilometers, respectively, will need to be reinforced or renewed by 2032. This is partly because electric cars are breaking through the market more slowly than expected.
Fluvius observes from the digital meters that fewer owners charge their electric cars simultaneously than expected, resulting in lower peak loads. Additionally, the installation of heat pumps to heat homes with electricity instead of natural gas or fuel oil is lagging behind previous estimates by Fluvius.
The transition to heat pumps may continue to be much slower in the future, as the renovation rate of homes in Flanders remains low. Regarding the gas networks, Fluvius does not plan any further investments for the time being.
1 billion euros
To finance its billion-dollar investments in the electricity grid, the grid operator Fluvius needs 1 billion euros in additional capital next year. That amount is expected to increase to between 1.7 billion and 2 billion euros by 2030. “Our goal is to finance these investments with a mix of 40 percent equity and 60 percent loans,” says Fluvius CEO Frank Vanbrabant.
The municipal shareholders and the Flemish government have the ambition to keep Fluvius in public hands. According to Fluvius, the operation is being hampered because the energy watchdog does not allow for a ‘fair’ compensation of the shareholders.
