Elia Memorandum (English version)

POWERING BELGIAN SOCIETY

FOR A CLEAN AND COMPETITIVE FUTURE

POLICY RECOMMENDATIONS FOR THE 2024 FEDERAL, REGIONAL AND EUROPEAN ELECTIONS

POWERING BELGIAN SOCIETY FOR A CLEAN AND

COMPETITIVE FUTURE

The transition to a low-carbon energy future is one of the most ambitious and exciting challenges of our generation. The acceleration of global warming and economic dependence on fossil fuels require urgent action, in the interest of future generations.

Energy efficiency is a priority. Not only is our society electrifying at an ever-faster pace (mobility, heating, production processes, etc.), but at the same time electricity generation is being decarbonised. As a result, electricity consumption is expected to rise by approximately 50% over the next ten years. To handle this increase in consumption, the generation capacity of renewable electricity must be more than doubled. These are significant challenges for Belgium.

One key to the success of the energy transition is the timely deployment of the grid infrastructure required to transmit renewable energy to industrial and residential consumption centres. In the short term, it is necessary to build the energy island that will connect 3500 MW of new offshore wind capacity located in Belgian territorial waters to the mainland. The Ventilus and Boucle du Hainaut connections are also critically important. Not only will they carry electricity to consumption centres, but they will also play a crucial role in facilitating security of supply.

Due to the fact that Belgium has a limited renewable energy potential, it is essential that we continue to connect our country via hybrid interconnectors to offshore generation facilities in the North Sea (in UK, Danish, Norwegian and other waters). It is by developing electricity transmission infrastructure that we will gain access to competitive energy prices and thus ensure the wellbeing of Belgian society and the anchoring of industry in Belgium.

A paradigm shift is needed: since electricity will be increasingly generated by renewable and variable energy sources, we must adapt the times at which we consume electricity in line with periods of abundance or scarcity of electricity generation. To achieve this flexibility, we need the involvement of as many stakeholders as possible, both homes and businesses. Their involvement must be facilitated so that everyone can make optimal use of their flexibility. This kind of individual commitment benefits everyone. Families will be able to reduce their electricity bills and the costs of managing the electricity system will remain under control. A win-win.

The combination of infrastructure development and flexibility will also make an effective contribution to the continuity of electricity supply in our country. These strategic choices for the next ten years can be compared to no-regret decisions.

Moreover, we must address these challenges in an increasingly digital world. The digitalisation of the energy sector entails major challenges. Managing our ever more decentralised and volatile energy system increasingly depends on cloud solutions that are generally developed abroad. This raises questions about the need for legislation to guarantee digital sovereignty over critical activities in this sector. It is essential that we consider how best to protect consumers in an environment where the laws of the market determine the value of the energy services they contract or offer. Elia is available and ready to discuss these and other issues with the government.

Achieving Net Zero targets by 2050 will require the orderly and efficient management of the energy transition. With this in mind, It is essential for Belgium to develop a long-term vision for its energy supply. This will help guide those economic players, including Elia, who will be called on to contribute to this objective.

Elia’s mission is to support the energy transition and facilitate security of supply for Belgium. Our companies and families must be able to count on sustainable, reliable and affordable electricity. In so doing, we can safeguard our current industrial base and employment rates attracting new investment.

Fréderic Dunon

Catherine Vandenborre Deputy CEO of Elia Interim CEO of Elia Group

THE FOUR MOST IMPORTANT PROJECTS FOR

THE NEXT LEGISLATIVE SESSION

ENERGY COMPASS 2050: GUIDING BELGIUM TOWARDS A CARBONNEUTRAL ECONOMY AND SOCIETY

Over the past ten years, the security of our energy supply has been a source of great concern. We have made every effort to complete projects on time in order to strengthen our energy supply in the short term. However, it is essential that we now decide what energy policy we want to pursue after 2030. If we do not do that, Belgium will face one energy crisis after another. A true, clearly focused energy strategy can enable us to guarantee the necessary investment for our companies and industries while keeping household energy bills under control.

ACCESS TO CARBON-NEUTRAL ENERGY AND COMPETITIVE PRICES THROUGH THE TIMELY DEVELOPMENT OF THE HIGHVOLTAGE GRID

A robust energy system requires investments in reliable and sustainable infrastructure. The North Sea has the potential to become one of the biggest power stations in Europe. By developing an energy island and interconnectors with other North Sea countries and with neighbouring countries, we are strengthening our access to renewable energy and our position as a central energy hub in Europe. This will only be possible if Elia can implement its development plan in a timely fashion, in particular the Ventilus and Boucle du Hainaut projects. Any delays will lead to higher energy bills and endanger our economic development.

MAKING IT EASIER FOR EVERYONE TO GET INVOLVED TO ENSURE A MORE AFFORDABLE ENERGY TRANSITION

Thanks to the development of electric cars, heat pumps, batteries (both domestic and industrial) and the electrification of industrial processes, both homes and companies now have flexibility. Everyone can adjust their electricity consumption in line with the availability of cheaper, sustainable electricity. This is a win-win: consumers benefit from lower prices and we avoid expensive interventions to maintain the grid’s balance. To achieve this, it is necessary to remove the barriers that currently prevent people from taking part in the electricity system through their own flexible consumption.

ENSURING BELGIUM’S DIGITAL INDEPENDENCE

The digitalisation of our energy system is underway, accompanied by an explosion in the amount of available data. Technological advances mean that developments are implemented via cloud-based IT architecture. This is enabling many new, interesting and user-friendly applications, but also brings with it the danger that we will become more dependent on other countries for the protection and storage of essential and sensitive data. It is therefore important for Belgium to take charge of its own digital sovereignty, determine a clear strategy and ensure its autonomy regarding the digital applications of the critical infrastructures it operates.

1

ENERGY COMPASS 2050: GUIDING BELGIUM TOWARDS

A CARBON-NEUTRAL ECONOMY AND SOCIETY

Our electricity system will change dramatically due to the electrification of society, resulting in new capacity requirements in order to guarantee supply. By anticipating this and taking structural measures, we can prevent Belgium from going from one energy crisis to another.

The war in Ukraine and the energy crisis have led to new policy measures that are accelerating the energy transition. This is exemplified by the electrification of mobility, heating and industry, which is progressing faster than expected.

The electricity system is not changing synchronously and this is creating tensions on both the supply side and demand side. As the demand for electricity rises, we will need additional capacity to meet the demand for electricity at any given time and to ensure that the lights stay on.

In addition to the agreement to extend the use of nuclear power plants, the capacity remuneration mechanism (CRM) is an important tool for maintaining security of supply in Belgium in the short and medium term. Additional measures are also needed: the timely implementation of infrastructure and the unlocking of flexible consumption. If this does not happen, additional

interventions will be required, which will be inadequate, complex and expensive.

In the long term, Belgian society has much to gain if we anticipate the future now. This will give the energy sector the time it needs to prepare properly to guarantee Belgium’s supply of energy. Belgium needs a concrete strategy for its energy mix that takes into account its climate goals and security of supply.

Belgium needs an energy compass that will determine how the energy transition is to proceed between now and 2050 and guide our companies, industry and consumers towards a carbon-neutral economy and society.

A STABLE POWER GRID IS OF THE UTMOST IMPORTANCE IF WE WANT TO ACHIEVE OUR DECARBONISATION GOALS. THIS WAS ONE OF OUR CRITERIA FOR INVESTING IN BELGIUM.

Manfred Van Vlierberghe, CEO ArcelorMittal

IN

ADDITION

TO MEASURES TO

GUARANTEE BELGIUM’S SUPPLY OF ENERGY IN THE SHORT TERM, WE NEED AN ENERGY COMPASS THAT WILL DETERMINE HOW THE ENERGY TRANSITION IS TO PROCEED BETWEEN NOW AND 2050 AND GUIDE OUR COMPANIES, INDUSTRY AND CONSUMERS TOWARDS A CARBON-NEUTRAL ECONOMY AND SOCIETY.

1.1. PREPARING NOW TO ENSURE FUTURE

SUPPLY

BE ABLE TO GUARANTEE SECURITY OF SUPPLY IN WINTERS TO COME BY IMPLEMENTING THE AGREEMENT BETWEEN THE BELGIAN STATE AND ENGIE AND ENSURING CAPACITY VIA CRM AUCTIONS.

CONTEXT

• In response to the Russia-Ukraine war and the energy crisis, the Belgian federal government decided in March 2022 to keep two Belgian nuclear units open for an additional 10 years and to apply the FLEX-LTO (Flexible Long-Term Operations) scenario.

• The electrification of our society is expected to occur both earlier and at a faster rate due to new policy objectives and action plans in response to the war in Ukraine and rising gas prices. This will create additional capacity requirements that can be met via the CRM.

• In the medium term it is vital to ensure the CRM can evolve in order to continue freeing up the capacity needed to ensure security of supply at the lowest possible cost. As a result, the CRM remains the key to a stable investment climate, while accelerating the energy transition.

• To prepare Belgium for the future, energy policy must include a concrete long-term vision that determines the supply strategy for our country after 2035. The desired method of supply in the future, as well as the acceptable technologies and our strategic dependence on foreign countries will all be decisive.

RECOMMENDATIONS

1. Ensure sufficient liquidity in future-proof CRM auctions

Elia calls on policymakers to make changes to the CRM framework to better take into account the economic realities of industrial players involved in demand management and the time needed to develop battery projects. This is necessary to ensure sufficient liquidity in future CRM auctions.

3. Align the tightening of CO2 emission rules with the CRM’s ability to provide the necessary replacement capacity

Due to more stringent CO2 emission regulations, the most polluting units will gradually disappear from the market and be replaced via the CRM. Elia calls on policymakers to adjust the speed at which CO2 emission rules are tightened in line with the ability of the CRM to provide sufficient replacement capacity. This is necessary in order to limit emissions from the Belgian generating fleet and at the same time guarantee security of supply.

2. Implement the agreement between the state and Engie to guarantee supply

The lifespan extension of the Tihange 3 and Doel 4 nuclear units must be implemented so that both units remain available during the winter of 2025-2026 (Flex-LTO). It is therefore necessary that the implementation measures in the agreement between the Belgian state and Engie be implemented in a timely manner.

4. Develop an Energy Compass 2050 that guides our country in its energy transition

Policymakers must develop an energy strategy for the period 2030-2050 that takes into account the desired energy mix and security of supply. This energy compass can guide our country towards a low-carbon economy and society. Elia proposes to investigate scenarios based on different possible energy mixes that can help policymakers develop this long-term strategy.

1.2. DEVELOPING A CLEAR REGULATORY FRAMEWORK

CONTEXT

• If Belgium wants to remain competitive, our country must take on a leadership role within the European institutions in order to closely follow the legal and regulatory developments at European level and steer them in the right direction. This will enable national and regional concerns to be raised and taken into account when the European rules are being drawn up.

• It is essential for Belgium to actively contribute to the development of energy legislation at European level. Various European recommendations – including those pertaining to financial resources for infrastructure, the relaxation of European public procurement procedures and access to data – are described in this memorandum.

• Decisions about the energy transition and the European electricity market cannot be made in isolation. Closer cooperation between countries also requires better coordination between different Belgian entities and policy levels. BELGIUM MUST IMPLEMENT CURRENT AND NEW EU ENERGY LEGISLATION QUICKLY AND EFFICIENTLY IN ORDER TO REMAIN COMPETITIVE WITHIN THE EUROPEAN ENERGY TRANSITION.

• A lot of European legislation has been passed that still needs to be transposed into federal and regional legislation. Smooth transposition creates legal certainty and consistency with neighbouring countries, avoids possible sanctions from Europe and supports companies in applying new European rules.

All energy legislation within the European Commission’s Fit for 55 package has been passed, with the exception of the Energy Taxation Directive. However, the directives on renewable energy and energy efficiency still need to be transposed into national and regional legislation in Belgium. In addition, the CBAM (Carbon Border Adjustment Mechanism) and AFIR (Alternative Fuels Infrastructure Regulation) are already directly applicable and have an impact on our electricity exchange with third countries (United Kingdom), on the one hand, and the rollout of charging stations and the use of their data, on the other.

RECOMMENDATIONS

5.

Ensure the timely and efficient transposition and application of European energy legislation

To remain competitive in Europe and keep pace in the energy transition, European legislation that has already been passed (Energy Efficiency Directive, Renewable Energy Directive, etc.) must be applied or transposed into national and regional legislation as soon as possible. Coherence with and consistency between different legislative projects and policy levels are crucial and additional administrative processes should be avoided. It is appropriate that policymakers make full use of the policy instruments that Europe offers Member States, one example being the Emergency Regulation in connection with high energy prices, which provides valuable tools for accelerating the national and regional licensing framework.

6. Ensure smooth cooperation with the United Kingdom

The United Kingdom is a close partner in terms of energy cooperation and the further development of renewable energy generation in the North Sea. The possible negative impact of Brexit should be limited. In particular, Belgium can contribute to the restoration of implicit market coupling with the United Kingdom in order to develop efficient hybrid interconnectors and an offshore network in the interests of Belgian grid users. In addition, policymakers should investigate and prevent the negative impact of CBAM (Carbon Border Adjustment Mechanism) on energy trade between the United Kingdom and Belgium.

7. Ensure we have an impact on energy and climate issues in the European Parliament

The European Parliament has an important role to play in developing new energy legislation. To ensure we can have a sufficient impact, it is essential that Belgian MEPs be broadly represented in the Committee on Industry, Research and Energy (ITRE) and the Committee on the Environment, Public Health and Food Safety (ENVI), for that is where future energy and climate policy is determined.

8. Put federal and regional interests on the European map

The Belgian presidency of the Council of the European Union will be over by the start of the next legislative session, but that does not alter the fact that the next federal and regional governments can actively weigh in on the European agenda. We must ensure that the crucial issues that will help achieve a competitive and sustainable society are addressed at European level. This involves discussions on market integration, support for infrastructure projects, access to data, consumer focus, the redistribution and reduction of costs and the licensing framework.

ACCESS TO CARBON-NEUTRAL ENERGY AND COMPETITIVE PRICES THROUGH THE TIMELY DEVELOPMENT OF THE HIGH-VOLTAGE GRID

By developing the high-voltage grid, Belgium can gain access to carbon-neutral energy and competitive prices. Permits, materials and labour are essential if we are to be able to build the necessary infrastructure in a timely manner.

In order to firmly anchor companies in Belgium, attract new investments and keep the energy transition affordable for everyone, access to sufficient electricity at competitive prices is essential.

Belgium is well located. Via the North Sea we have access to an enormous potential of renewable energy and the diverse energy mix of other North Sea countries. Our location in the heart of Europe allows us to import and export electricity via interconnectors with neighbouring countries. This reduces the costs and capacity needed to decarbonise our society.

A strong and reliable high-voltage grid is the basic condition for a competitive and sustainable electricity system. The energy transition will fundamentally change the Belgian high-voltage grid in the years ahead. In recent years, we have worked hard to identify these needs and start up important projects to support the evolution towards a climate-neutral economy and society.

Elia’s Federal Development Plan (2024-2034) provides an overview of all necessary projects. The Princess Elisabeth Island will combine the energy from offshore wind farms and bring it

onshore and serve as a crossroads for various (hybrid) interconnectors with other North Sea countries. The Ventilus and Boucle du Hainaut projects address missing links in our high-voltage grid. In the rest of the country, the existing high-voltage grid (380kV) is being optimised with new conductors (HTLS), doubling transmission capacity.

By 2050, Belgium will be able to meet as much as 50% of its direct electricity needs through the limited domestic potential of wind and solar energy. In the long term the further expansion of the high-voltage grid is necessary in order to gain access to additional renewable energy sources as part of the future energy mix that will help Belgium move towards a low-carbon society.

SINCE THE ENERGY TRANSITION IS NOT POSSIBLE WITHOUT A STRONG AND MODERN HIGH-VOLTAGE GRID, IT IS IMPORTANT THAT THE PROJECTS ELIA HAS PLANNED FOR THE YEARS AHEAD CAN BE FULLY IMPLEMENTED. WE CANNOT AFFORD ANY DELAYS.

2.1. ENSURING ACCESS TO SUFFICIENT

AND RENEWABLE

ENERGY

CONTEXT

BELGIUM MUST BE ABLE TO ENSURE ACCESS TO SUFFICIENT AND RENEWABLE ELECTRICITY AT COMPETITIVE PRICES BY MAKING FULL USE OF ITS LOCATION ON THE NORTH SEA AND IN THE HEART OF EUROPE.

• How much we pay for electricity is the result of supply and demand. Ensuring our access to renewable energy sources and increasing our exchange capacity means companies and consumers always have access to sufficient and renewable energy at competitive prices.

• Despite our limited coastline, Belgium is one of the leaders in offshore wind power and today generates 2.3 GW in our part of the North Sea. By 2030 this will increase to 5.8 GW. The Federal Energy and Climate Plan sets out our ambition to research the potential for increasing this to 8 GW by 2040.

• Major offshore projects on the agenda in the years ahead. With the construction of the Princess Elisabeth Island, Belgium will achieve a world first. In addition, (hybrid) interconnectors with the United Kingdom (Nautilus) and Denmark (TritonLink) are planned. Connections with other North Sea countries, such as Norway, can also be explored.

• In addition to (hybrid) offshore interconnectors, it is equally important to upgrade and further expand the existing interconnectors with our neighbouring countries of the Netherlands, France and Germany.

• Current resources at European level are inadequate for supporting certain projects of common European interest. The European Connecting Europe Facility (CEF) subsidy programme, which focuses on investments in infrastructure for transport, energy and telecoms, is not sufficient for helping finance cross-border grid infrastructure such as interconnectors.

At the Ostend Summit in 2023, Belgium, together with eight other European countries, pledged to develop the North Sea into Europe’s largest green power plant. The target is 120 GW of offshore wind capacity by 2030 and at least 300 GW by 2050. This will allow Belgium to have access to these enormous amounts of renewable energy in the future.

RECOMMENDATIONS

9. Support the development of interconnectors with North Sea countries and neighbouring countries

Interconnectors are crucial for ensuring security of supply and the affordability of the energy transition. Accordingly, policymakers should continue to support the development of (hybrid) interconnectors with the United Kingdom, Denmark, Norway, France, Germany and the Netherlands, and look out for additional opportunities. At bilateral level, attention should be given to developing existing and new memoranda of understanding or roadmaps. This is essential for being able to develop and implement projects in a timely manner, and also for being eligible for European financial support.

10. Continue to collaborate on the world’s first energy island and integrate wind farms

Within the offshore task force, Elia wishes to work with the administrations and stakeholders involved to further coordinate, plan and implement the tender and offshore bidding zone for the integration of offshore wind energy in the Princess Elisabeth zone and to build the Princess Elisabeth Island in the most efficient, timely and sustainable manner possible.

11. Already develop a strategy for increasing offshore capacity to 8 GW

If policymakers want to expand the wind energy capacity in the Belgian North Sea to 8 GW via repowering or a new concession zone, it is necessary to develop a strategy for this now. In addition, the Marine Spatial Plan (2026-2034) must include a cable corridor so that the additional electricity can be brought ashore.

12. Devise a regulatory framework for the accelerated development of an offshore network

At European level, a regulatory framework is needed for cost-sharing between the countries, grid operators and wind farms involved. This framework must also determine the allocation of rights for wind farms that are connected to hybrid interconnectors. Closer cooperation with the United Kingdom and Norway (which are not EU members) is necessary in order to operate an efficient North Sea network.

13. Ensure more European resources for investments in energy infrastructure

Belgium must call for more European subsidy resources (CEF) to be released for those projects that contribute most quickly to the decarbonisation of society. The Multiannual Financial Framework (MFF), which comprises the European Union’s long-term budget, is due for an overhaul, which is the perfect time to make this happen.

2.2. SPEEDING UP AND SIMPLIFYING PLANNING AND PERMITTING PROCESSES

CONTEXT

SIMPLIFY AND ACCELERATE PLANNING AND PERMITTING PROCESSES TO MINIMISE THE LEAD TIME FOR EXPANDING AND UPGRADING THE HIGH-VOLTAGE GRID.

• Since high-voltage projects usually have an impact on the environment, support from local stakeholders is needed. That is why Elia invests heavily in consultation and communication, including with local politicians and local residents.

• High-voltage projects usually encounter a lot of resistance, resulting in a high risk of legal appeals. In addition, existing decision periods are not always adhered to, which can cause decisions to take longer or procedures to be automatically cancelled. This can lead to major delays in obtaining permits.

• Urban planning is decisive when it comes to the speed at which infrastructure can be created. Planning and permitting processes can proceed faster when the future needs of the electricity grid have already been anticipated.

• The digitalisation of permits involves stakeholders in the consultation process earlier. This improves participation and provides better integrated solutions and can limit possible delays during the process.

• The European Commission and the European Parliament have implemented reforms to accelerate the licensing of renewable energy projects. These reforms have not yet been implemented in regional legislation.

Ventilus and Boucle du Hainaut: the missing links in the high-voltage grid in Belgium

In the provinces of West Flanders (Ventilus) and Hainaut (Boucle du Hainaut), the missing links in the high-voltage grid in Belgium are being addressed.

This is necessary in order to integrate the additional wind energy from the Princess Elisabeth zone and new subsea interconnectors into the high-voltage grid and to bring this electricity from the North Sea to consumption centres inland.

In addition, these projects will bolster the high-voltage grid in West Flanders and Hainaut. This supports growing local electricity requirements, creates connection capacity for companies and domestic (renewable) energy sources, and contributes to competitive electricity prices and the economic development of both regions.

Not only does this also create multiple routes for transmitting electricity, but this interlinking increases the reliability of the Belgian high-voltage grid in the event of incidents or maintenance.

RECOMMENDATIONS

14. Prioritise the Boucle du Hainaut and Ventilus projects

Elia requires a strong commitment from the regional authorities with a view to ensuring acceptance of the Boucle du Hainaut and Ventilus projects, giving appropriate priority to the planning and permitting process and ensuring follow-up within the agreements of the regional governments. Any delays to these projects will have an impact on connection and transmission capacity in the North Sea, Hainaut, West Flanders and the region around Ghent, and will lead to increasing costs due to rising raw material prices and less competitive electricity prices.

15.

Recommendations for Flanders

• Implement the notion of ‘higher public interest’

In order to build renewable energy projects and grid infrastructure more quickly in line with the energy transition, Europe introduced the notion of ‘overriding public interest’ (see Directive (EU) 2018/2001, as amended by Directive (EU) 2023/2413). Elia requests that this principle be further elaborated in regional legislation, so that not only can shorter lead times or exemptions from permits be achieved, but also so that licensing authorities, when weighing up interests, should opt sooner in favour of critical infrastructure ‘of higher public interest’ that is necessary to realise the energy transition.

• Develop urban planning that anticipates future needs

It is necessary to anticipate high-voltage infrastructure in regional or local planning initiatives and to plan utility and community service areas when developing new industrial, residential or agricultural areas, or in areas where wind turbines are being erected.

16. Recommendations for Wallonia

• Implement the notion of ‘higher public interest’

In order to build renewable energy projects and grid infrastructure more quickly in line with the energy transition, Europe introduced the notion of ‘overriding public interest’ (see Directive (EU) 2018/2001, as amended by Directive (EU) 2023/2413). Elia requests that this principle be further elaborated in regional legislation, so that not only can shorter lead times or exemptions from permits be achieved, but also so that licensing authorities, when weighing up interests, should opt sooner in favour of critical infrastructure ‘of higher public interest’ that is necessary to realise the energy transition.

• Develop urban planning that anticipates future needs

It is necessary to anticipate high-voltage infrastructure in regional or local planning initiatives and to plan utility and community service areas when developing new industrial, residential or agricultural areas, or in areas where wind turbines are being erected.

• Introduce ‘presumption of inclusion’ in regional plans

For historical reasons, the location of infrastructure in a regional plan and on the ground may differ. To avoid lengthy procedures when regularising years of inconsistency, Elia requests that a ‘presumption of inclusion’ be included in the CoDT regional plan for all high-voltage lines that existed prior to 1 March 1998.

• Limit unlawful appeals

By analogy with the regulations in Flanders, Elia requires that in the event of an appeal against a permit or a plan, the applicant must always demonstrate a legitimate interest when alleging the violation of a general legal norm or principle. Furthermore, Elia believes that legal compensation should be payable by the claimant in the event that the appeal is rejected on this basis.

• Ensure digitalisation and administrative simplification

Elia supports the digitalisation of permits in Wallonia and asks policymakers to make the necessary human and technical resources available to that end. Elia wants to contribute to this initiative based on its experience in other regions, where this has already delivered demonstrable benefits.

17. Recommendations for the Brussels-Capital Region

• Ensure better coordination on the development and management of cable infrastructure

The extensive underground infrastructure means there is not enough space to further develop the electricity grid and this regularly requires the expensive relocation of cable infrastructure. Elia asks to be consulted in a timely manner on new developments in the public space and to meet with multiple stakeholders to ensure the better organisation of the underground cable and pipe network.

2.3. ENSURING SUFFICIENT

MATERIALS AND LABOUR

ENSURE THE AVAILABILITY OF LABOUR AND THE CAPACITY OF STRATEGIC SUPPLY CHAINS FOR MATERIALS AND TECHNOLOGIES TO IMPLEMENT TIMELY GRID UPGRADES.

CONTEXT

• An international race is underway for critical raw materials, technologies and derivatives needed for the energy transition.

• System operators throughout Europe are investing in their infrastructure. This is leading to capacity problems in supply chains for high-voltage equipment and overflowing order books for contractors.

• System operators must follow European public procurement procedures. Industrial players that also order materials and equipment to electrify their activities are exempt from these procedures and can therefore act more quickly in the already tight supply market.

• The energy industry is also facing a war for talent and faces a major shortage of technically skilled workers. In addition, the competencies required for planning, designing, building, operating and maintaining a reliable and safe grid infrastructure are changing.

RECOMMENDATIONS

18. Identify supply risks and develop policy strategy

Policymakers, in dialogue with system operators and energy producers, should identify the supply risks for projects required for the energy transition and develop a policy strategy to stimulate investments in essential production lines and recruitment in Belgium.

19. Temporarily relax European public procurement procedures

Elia is calling for a temporary relaxation of European procurement rules through exceptions and/or an increase in existing threshold amounts for critical infrastructure projects or technologies that are essential for implementing the energy transition.

20. Better align education and retraining policies with the needs of the energy sector

Elia wants to help develop specific training and retraining programmes together with regional policymakers, educational institutions and sectoral federations and give them visibility in order to have sufficient electrical engineering profiles for the energy sector in the future.

2.4. PREVENTING BOTTLENECKS ACROSS THE HIGH-VOLTAGE GRID

CONTEXT

ANTICIPATE THE ACCELERATED ELECTRIFICATION OF INDUSTRY AND MOBILITY TO AVOID CONGESTION ACROSS THE HIGH-VOLTAGE GRID AND BE ABLE TO INVEST IN GRID REINFORCEMENTS IN A TIMELY FASHION.

• The energy transition is leading to a higher number of connection requests for electrification in industry, renewable energy sources and battery storage. The current regulatory framework that regulates procedures for connections is inadequate for keeping up with this sharp increase.

• At what pace and in which locations our industry will electrify depends largely on the ambitions of individual players. To be able to anticipate this in a timely fashion and avoid congestion across the electricity grid, more cooperation, coordination and

planning is necessary between industry, government and system operators.

• At European level, consensus is growing on the need for ‘anticipatory investments’ and a more integrated approach that gives grid operators the space to anticipate future electrification and potential benefits in new grid investments, so that (offshore) grid infrastructure is developed in a future-oriented manner from the start.

Primary steelmaking, paper industry manufacturing companies and logistics sector

Data centers, cement, glass, steel and chemical sector

Largest integrated chemical cluster in Europe and logistics sector

ALBERT CANAL

Ferrous and non-ferrous metals, (petro)chemical companies, non-metallic minerals, textile industry and others

Steel, chemical and cement sector

RECOMMENDATIONS

21. Accept that grid investments anticipate expected electricity needs in 2050

In order to achieve the energy transition, the high-voltage grid in Belgium will have to be further adapted in the future. In addition, it is essential that policymakers and regulators accept that grid investments, which are included in the European, federal and regional development plans for grid infrastructure, must anticipate the predicted future electricity needs that take into account the proposed energy and climate goals for 2050.

22. Facilitate a process to map out the electrification of industry

Elia, together with governments, distribution system operators, Fluxys and provincial development companies, wants to start an information sharing process with industrial players in order to map out their expected electrification and investments in renewable energy at an early stage. This must be done for each geographical industrial cluster, so that appropriate grid solutions can be provided.

23. Support a renewed legislative framework for connection requests

In order to be able to process the growing number of connection requests in a timely manner, it is necessary to update the legal regulatory framework that regulates procedures for (flexible) connections and reservations across the transmission grid.

MAKING IT EASIER FOR EVERYONE TO GET INVOLVED TO ENSURE A MORE AFFORDABLE ENERGY TRANSITION

3

In the future, more flexible consumption will be needed in order to absorb fluctuations in renewable energy. Thanks to electric cars, heat pumps, home batteries and industrial processes, consumers and companies can participate en masse in the energy market and leverage their flexibility, while grid operators can keep the electricity system under control and limit system costs. This is a win-win situation for consumers and society.

The increase in renewable energy sources makes electricity generation intermittent because their availability to generate power is not assured when demand peaks. A paradigm shift is needed: we must modify our consumption patterns in line with periods of abundance or scarcity of electricity generation.

The rising number of electric cars and heat pumps indicates that they are quickly reaching the mass market. Charging all these electrical devices at the same time would be very inefficient and jeopardise the stability of our power grid. It is essential to be able to exploit the flexibility of these devices as optimally as possible.

The good news is that flexible consumption is to everyone’s advantage. Consumers and companies that take part should take advantage of their flexible consumption. In so doing, they will be able to avoid expensive price spikes by mainly using electricity when there is sufficient wind or sunshine. While exploiting the benefits of their individual flexibility, together they help to smooth out consumption peaks and efficiently manage the variability of renewable energy.

As a result, the costs of managing the electricity system are kept under control, which is in everyone’s interest. This contributes directly to security of supply, is an important lever for reducing capacity needs and results in annual savings of more than €200 to €400 million in system costs.

This requires the development of one new ecosystem in which new and existing service providers offer consumers custom flexibility solutions in accordance with their needs and without loss of comfort. They will ensure greater innovation and competition in the energy sector, benefiting both consumers and the electricity system as a whole.

Implementing this is not without its challenges. In addition to planning the evolution of the existing market model and encouraging consumers, unlocking this flexibility also requires standardising products and optimising processes.

REAL ESTATE HOLDS AN ENORMOUS AMOUNT OF POTENTIAL FLEXIBILITY. FOR EXAMPLE, HEAT PUMPS CAN EASILY BE SWITCHED ON A LITTLE EARLIER OR LATER, DEPENDING ON THE AVAILABILITY OF GREEN ELECTRICITY. THIS FLEXIBILITY CAN MAKE A HUGE CONTRIBUTION TO A MORE EFFICIENT ENERGY SYSTEM AND REDUCE THE COSTS FOR END USERS – WITHOUT HAVING TO ALTER THEIR LEVELS OF COMFORT.

Bart Gentens, Chief Operational Officer, Aug.e

IT IS ESSENTIAL THAT WE QUICKLY MOVE TOWARDS AN ELECTRICITY MARKET IN WHICH CONSUMERS CONSUME ELECTRICITY IN A FLEXIBLE MANNER AND ENJOY THE BENEFITS THIS BRINGS THROUGH INNOVATIVE, CUSTOMISED ENERGY SERVICES.

3.1. ALLOWING CONSUMERS TO ENJOY

THE BENEFITS OF FLEXIBILITY THROUGH APPROPRIATE ENERGY SERVICES

ALLOW CONSUMERS AND BUSINESS TO ENJOY AND LEVERAGE THE BENEFITS OF FLEXIBILITY VIA CUSTOMISED ENERGY SERVICES AT AND BEHIND THE METER.

CONTEXT

• The energy transition and the digital revolution are converging. Thanks to digitalisation, solar panels, heat pumps and batteries are controlled intelligently. Consumers can offer their flexibility to the energy market by shifting their consumption to those times when a lot of energy is available. They will play an active role in the electricity system of the future.

• Consumer flexibility will increase the number of market participants. Customised, low-cost and low-friction energy services will improve competition in the market and increase the efficiency of the entire system.

• It is essential that consumers, at the point behind their connection to the electricity grid (i.e. the meter), have access to various energy contracts and services. This will allow them, for example, to leverage the flexibility of (certain) electrical devices using a dynamic price contract, without being exposed to major price fluctuations for their basic needs.

• Offering and receiving innovative energy services is complex, time-consuming and expensive due to current regulations. It is essential that we quickly evolve towards an electricity market in which the consumer is central and can enjoy the benefits of the energy transition.

RECOMMENDATIONS

24. Accelerate the rollout of smart meters

A smart meter is the basic requirement for providing flexible services. Current thresholds for the application and installation of smart meters should be lowered, so that a faster rollout is possible, especially among consumers who already have devices that allow flexible energy consumption.

25. Support the development of universal standards for smart devices

It is crucial that electric vehicles, charging stations, heat pumps, etc. can communicate openly, in the same language, with commercial market parties. It is appropriate to develop universal standards together with manufacturers at European level for devices with the potential for flexible consumption.

26. Redesign entry requirements for new providers of flexible services

The legal and regulatory supply conditions for market parties and the digitalisation of the E2E market processes must be adjusted to allow new, innovative players to enter the electricity market more quickly. This process must be able to take place digitally and must not entail additional costs for the applicant.

27. Create a framework enabling the existing market model to evolve

A new regulatory framework must be developed that enables the existing market model to evolve into a model in which consumers can, in line with their wishes, use various energy contracts and services at and behind the connection point (i.e. the meter) to the grid. In addition, it must be made possible for consumers to leverage and support their flexibility through real-time price information, among other things, without being exposed to large price fluctuations for their basic needs and non-flexible consumption.

3.2. ENCOURAGING FLEXIBLE CONSUMPTION VIA ELECTRICITY BILLS

INFORM AND ENCOURAGE END USERS TO OFFER THEIR FLEXIBILITY TO THE ENERGY MARKET AND AT THE SAME TIME GIVE THEM THE OPPORTUNITY TO OPTIMISE THEIR BILLS AND IMPROVE COMFORT.

CONTEXT

• The presence of smart solar panels, heat pumps and batteries gives consumers the opportunity to offer their flexibility to the energy market. They will play an active role in the electricity system of the future.

• Thanks to the application of grid tariffs that encourage flexible consumption, consumers can be encouraged to consume and store electricity when it is abundant and inject it back into the grid when it is scarce.

• This allows the consumer to optimise their bills, improve their comfort and enjoy the benefits of the energy transition, while grid operators can manage the energy system more efficiently thanks to the extra flexibility – a win-win for everyone.

• By opening up the market, innovative companies can develop new energy services that make it possible to alleviate consumer concerns, so that they can use energy without loss of comfort when it is most advantageous.

Consumers with a set of solar panels, heat pumps and electric cars who can use smart energy services to link their consumption behaviour to the variables of the electricity market will be able to save between €30 and €320 on their electricity bill annually.

RECOMMENDATIONS

28. Encourage the purchase of smart devices through a flex-ready label

The implementation of a general flex-ready label at European level can contribute to awareness about smart devices. In addition, policymakers can support flexible consumption by encouraging or requiring the purchase of devices with a flex-ready label.

29. Support the development of grid tariffs that encourage flexible consumption

Grid tariffs can encourage consumers to adjust their own consumption in line with the availability of renewable energy and thus optimise their electricity costs. Grid tariffs to discourage peak consumption hinder flexibility and will logically be avoided.

30. Give consumers maximum access to dynamic price contracts

It is important that policymakers, through an appropriate legal framework, encourage all energy suppliers to offer dynamic price contracts that give end users the opportunity to leverage the flexibility of their electric vehicles, heat pumps and home batteries via the energy market.

31. Give consumers maximum access to dynamic price contracts

Elia is calling on regulators to ensure that online comparison tools for energy contracts factor in the potential of existing flexible devices, based on historical data, in calculations in order to offer consumers the best possible contract, and also to include this in their annual market report. In addition, electricity bills must educate consumers about the benefits of flexible consumption. This requires changing the legislation setting out the content of energy bills.

4 ENSURING BELGIUM’S DIGITAL INDEPENDENCE

Digital technologies are decisive for the functioning of our society, including the operation of the electricity system. This dependence makes us vulnerable, which is why it is crucial that Belgium take its digital sovereignty into its own hands.

Digitalisation has become indispensable for the economy, industry and society in general. The energy sector is also undergoing a digital transition. Large amounts of data are constantly used to make real-time decisions. This leads to the more efficient, reliable and sustainable operation of the electricity system.

The development of digital technology is largely in the hands of Big Tech, meaning the core of our digital infrastructure is provided by non-European countries. This dependence makes our digital infrastructure vulnerable to espionage and cyber-attacks.

To reduce this dependence, it is important that Belgium increases its influence on the development and use of digital technologies. We must take digital sovereignty into our own hands and align our national ambitions with the evolving European landscape. This is necessary to secure our critical infrastructures and make our country less economically vulnerable.

This requires the development of a long-term vision and organisation in which public-private partnerships are central. Furthermore, it is essential for Belgium to deploy and secure digital connectivity infrastructure that can be used by critical sectors and service providers. To safeguard our competitiveness, it is also necessary to encourage digital talents, research and innovation.

As Belgium establishes and implements its national digital priorities, it is essential that we remain committed to working with regulators and decision-makers to ensure that we stay at the forefront of global digital progress and thus not completely outsource our future development.

AT PROXIMUS WE BELIEVE WE HAVE A KEY ROLE TO PLAY IN ENSURING DIGITAL SOVEREIGNTY FOR OUR COUNTRY AND FOR EUROPE. BY DEVELOPING SOVEREIGN CLOUD SOLUTIONS AND CONTINUOUSLY INVESTING IN CYBER SECURITY, WE ENSURE THAT CONSUMERS, COMPANIES AND GOVERNMENTS CAN FULLY RELY ON DIGITAL TECHNOLOGIES.

Guillaume Boutin, CEO Proximus Group

WE CAN REDUCE OUR DEPENDENCE AND VULNERABILITY BY TAKING OUR DIGITAL SOVEREIGNTY INTO OUR OWN HANDS THROUGH THE DEPLOYMENT OF A ROBUST DIGITAL INFRASTRUCTURE AND ENCOURAGING DIGITAL TALENT, RESEARCH AND INNOVATION THAT CONTRIBUTE TO ITS DEVELOPMENT, MANAGEMENT AND SECURITY.

4.1. DEVELOPING A LONG-TERM VISION THAT SUPPORTS COLLABORATION

CONTEXT

DEVELOP A NATIONAL LONG-TERM VISION AND ORGANISATIONS THAT CAN SUPPORT AND PROMOTE BELGIUM’S DIGITAL SOVEREIGNTY, AND INTEGRATE IT INTO A EUROPEAN FRAMEWORK.

• Digital sovereignty is based on a long-term vision that covers multiple dimensions: data protection, digital literacy and education, digital innovation, digital infrastructure and cyber security.

• Belgium needs an extensive digital road map providing a national outlook for the benefit of industries, entrepreneurs and innovative companies. Planning and implementing a comprehensive and coherent national digital strategy across dimensions is a necessary step for securing our industry and the future of the country.

• It is essential that the long-term vision for digital sovereignty in Belgium supports extensive public-private partnerships with critical infrastructure and service companies in defence, energy, telecommunications and mobility. This is necessary to ensure the successful and coordinated implementation of the strategy.

RECOMMENDATIONS

30. Develop a Digital Roadmap 2030 for Belgium

It is crucial that policymakers develop a digital roadmap that balances immediate needs with long-term goals. This national strategy must pay attention to all underlying drivers that are essential for achieving our digital sovereignty by 2030, such as technological developments, digital talents and competences, public-private partnerships, optimal allocation of resources and regulation in crucial sectors.

31. Establish an overarching set of policies that can provide leadership

It is impossible to implement a long-term vision without an entity that can provide leadership. It is essential to set up a policy group consisting of experts from FPS Policy & Support, Digitaal Vaanderen (in Flanders) and Agence du Numérique (Wallonia), which can provide leadership to maintain, promote and help finance Belgium’s digital agenda. This policymaking body can be advised by a group of Belgian industrial and leading digital companies that play an important role in rolling out the digital agenda.

4.2. ORGANISING THE ROLLOUT OF

A STRONG DIGITAL INFRASTRUCTURE

BELGIUM MUST INVEST IN THE ROLLOUT OF A STRONG DIGITAL INFRASTRUCTURE, PAYING SUFFICIENT ATTENTION TO SECURE ACCESS TO THE RIGHT DATA.

CONTEXT

• Data plays a fundamental role in our society. A strong digital infrastructure consisting of connectivity, data centres and the cloud forms the basis for further innovation, security and sovereignty.

• In addition, this is an absolute precondition for a robust electricity system in the digital age. It enables automated decision-making, improving risk prediction and incident analysis.

• It is essential that digital infrastructure used by critical sectors and service companies be adequately protected in order to limit the risk of cyber-attacks.

• To manage an increasingly complex electricity system, secure access is needed to the right data used for real-time decision making. In a consumer-centric energy market, the security of transactions, insights and communications between devices and market parties and consent management (GDPR) are also becoming increasingly important.

RECOMMENDATIONS

32. Establish national guidelines for protecting critical digital infrastructure

To adequately protect digital systems (hosting, connectivity, etc.) for critical infrastructure, policymakers should also establish, in addition to existing EU regulations, clear national guidelines for the use of private and hybrid clouds.

33. Establish strategic partnerships to secure digital infrastructure

Elia asks that the federal government develop long-term strategic partnerships with Belgian cyber security companies, hyperscalers and research units to monitor and strengthen the security of the shared national digital infrastructure.

34. Support and implement EU legislation on data access and exchange

Market players find it difficult to access consumer preferences or data from smart devices. Elia is calling for upcoming European regulations that provide an answer to this to be supported and implemented in existing legislation.

35. Facilitate the linking of existing databases with electricity consumption data

Databases that give consumers and market parties access to electricity consumption data already exist in Estonia, Norway, the Netherlands and the United States. Elia, together with the distribution system operators, wants to link existing databases such as Atrias and Flex Hub, so that the rapid development of flexible, customised energy services is possible. Elia is asking policymakers and regulators to facilitate this process and support it where necessary.

4.3. ENCOURAGING DIGITAL TALENTS,

RESEARCH AND INNOVATION

CONTEXT

SUPPORT BELGIUM’S DIGITAL FUTURE BY STRENGTHENING THE DIGITAL LITERACY OF THE WORKFORCE AND ENCOURAGING ACADEMIC RESEARCH AND DIGITAL INNOVATION.

• Technology is nothing without talented staff. Education is the key to training Belgium’s future digital talents who are needed to develop, maintain and protect future critical digital infrastructure.

• To fully exploit its digital sovereignty, it is crucial that Belgium strengthen digital literacy by preparing the next generation and upskilling the current workforce to drive the implementation of an ambitious digital vision.

• For Belgium to have the necessary skills in the future, partnerships are needed in which the government, together with critical infrastructure and service companies, takes the lead to develop the much-needed digital training, research and innovation framework that has been lacking in our country for years.

RECOMMENDATIONS

36. Develop targeted digital competency programmes

Elia aims to work with policymakers and universities to develop specialised competency programmes that focus on nationally critical digital skills and establish a national digital competency framework that provides clarity about the skills needed.

37. Forge partnerships for talent developments

To promote the growth of local talent, it is important that policymakers enter into formal partnerships or strengthen existing initiatives (e.g. MolenGeek and AI4Belgium) to set up joint talent development programmes and link them to industry.

38.

Integrate

R&D with academia

Elia asks policymakers to allocate funds for joint R&D projects between digital companies, critical industries and universities, and to set up an academic liaison team to foster relationships with universities and promote joint research.

39. Encourage innovation in digital services for critical infrastructure

Policymakers should encourage innovation in crucial services for critical infrastructure through grant programmes or favourable loan terms for emerging tech start-ups and innovative digital research programmes.

ABOUT ELIA

Elia Transmission Belgium operates the Belgian electricity transmission grid. We operate the Belgian high-voltage grid (from 30kV to 400kV), which includes over 8,849 km of lines, underground cables and subsea cables throughout Belgium. With a reliability level of 99.99%, we provide society with the robust power grid that is so important to socioeconomic prosperity. We ensure that generation and consumption are balanced 24/7. Our role as transmission system operator is critically important to our society.

We transmit electricity from generators to distribution networks, which in turn deliver it to every consumer. We also play a vital role in the economy, as our grid also directly supplies large companies connected to the grid. In carrying out our projects, we engage in proactive stakeholder management by establishing two-way communication channels between all relevant parties very early on in the development process. We also offer our expertise to different players across the sector in order to build the energy system of the future.

Elia Transmission Belgium is part of Elia Group, one of the five largest transmission system operators in Europe. Elia Group supplies 30 million end consumers with electricity via its subsidiaries in Belgium (Elia) and the north and east of Germany (50Hertz). In addition to its activities as a transmission system operator, Elia Group provides consulting services to international customers through its subsidiary Elia Grid International (EGI). In recent years, the Group has launched new non-regulated businesses, such as re.alto (the first European digital marketplace for the exchange of energy data) and WindGrid (for the development of offshore electricity grids in Europe and beyond). Elia Group is a listed holding company whose core shareholder is the municipal holding company Publi-T.

Transmission

Managing the infrastructure Balancing the electricity system Facilitating the market Trusteeship Generation Renewable

4 societal tasks

Elia Group headquarters

| bd de l’Empereur 20

| B-1000 Brussels

| T +32 2 546 70 11

| F +32 2 546 70 10

| info@elia.be

Responsible editor

| Catherine Vandenborre

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