TIME TO SEIZE THE MOMENT

Dear reader,

A remarkable event occurred in May 2023. For the first time ever over the course of a month, wind farms and solar panels across the EU generated more electricity than fossil fuel power plants. This shows what remarkable progress we have made in terms of the energy transition.

Comparable advancements are taking place on the demand side. The spread of electrification across the Belgian mobility, heating and industrial sectors is ramping up at a faster speed and earlier than forecasted. This is not a solely Belgian phenomenon. Recently, the French and Swedish grid operators published their adequacy reports, both of which conveyed similar messages.

Indeed, the Russian invasion of Ukraine and the gas crisis have clearly raised energy-related policy to ‘code orange’ levels. Over the past year, a raft of measures was adopted to accelerate the build-out of renewable energy, infrastructure construction and electrification levels. The energy transition is being geared up as awareness has grown that speeding up our journey to net zero is not only beneficial for the climate, but will also offer long-term price stability and protect against high gas and electricity prices.

We have observed from previous technology shifts that a new product’s adoption, from uptake to mass market, happens in an exponential and disruptive way. A similar spike in growth is just around the corner for the electrification of mobility and heat.

Undoubtedly, our country is on the verge of a profound transformation. Within the next two to three decades, Belgium’s economy will undergo a shift from one which runs on fossil fuels to a sustainable one that optimises green resources and efficiency.

Amidst this wave of transformation, the implementation of the capacity remuneration mechanism (CRM) in Belgium represents one crucial lever to facilitate security of supply. However, if we want to improve the efficiency of the system and keep the cost of the energy transition under control, additional action is required, particularly in terms of digitalisation and infrastructure.

By combining digitalisation and electrification, we can reduce system costs. This entails fostering more flexible consumption by incentivising the usage of millions of appliances during off-peak periods. It requires digital meters, smart charging and smart usage standards, data exchange platforms, and market reforms.

The urgent need for investments in infrastructure to meet the growing demand for electricity and integrate renewables into the system is widely recognised. However, concerns about potential impacts on consumer bills has led to a reluctance to act. This hesitation is one of the main challenge we have to overcome.

With an intensified commitment to infrastructure delivery and flexibility participation, our decision makers possess the potential to steer this energy transition towards success.

Chris Peeters CEO Elia Group