Belgian electrification is reaching a tipping point – Elia

Belgian electrification is reaching a tipping point – Elia
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According to a new study from Belgian TSO Elia, although policy measures in Belgium have been speeding up the country’s energy transition, electrification has been happening faster than expected and flexibility will need to be more readily tapped to balance supply and demand.

Elia’s 2024 – 2034 Adequacy and Flexibility Study for Belgium outlines how the expected spread of electrification across society is happening both earlier and at a faster speed than anticipated, namely in the mobility, heating and industrial sectors.

However, the transmission system operator for Belgium states that the speed of change is not synchronous across the electricity system, which is causing tension both on the supply and demand side.

According to Elia, as electricity needs rise, a number of structural measures will be needed to complement the country’s Capacity Remuneration Mechanism (CRM), which is a short term measure that EU countries can introduce to remunerate power plants for medium and long-term security of electricity supply.

Over the coming decade, they state, extensive electrification will change the very nature of the Belgian electricity system.

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Specifically, the study espouses four key messages:

  1. Electrification is spreading across society both earlier and at a faster speed than predicted.

The war in Ukraine and rising gas prices have resulted in new targets and action plans linked to ensuring an independent, resilient and climate-neutral energy system.

This is creating additional capacity needs, which can be addressed by the CRM. Electrification combined with the accelerated expansion of low-carbon electrons will be one of the main levers for decarbonising society over the next 10 to 20 years. The implementation of these two measures is gaining momentum in three key sectors: mobility, heating and industry.

This is having a direct impact on the country’s supply and adequacy needs. The expected spread of electrification across society will create additional capacity gaps from 2027 onwards, which can be addressed by Belgium’s CRM.

The rules and principles to this mechanism are governed by national and European regulations, and are rightfully aimed at avoiding over-procurement. Against the background of electrification and Belgium’s increasing electricity demand, the CRM process involves yearly adjustments to auctions and the stepwise contracting of required capacities

  1. Flexible consumption has the potential to flatten consumption peaks and manage RES variability, so directly contributing to security of supply.

Until now, flexibility has mainly been used as an in-the-moment ancillary service that helps grid operators address imbalances between supply and demand.

For example, it has been used to manage operational security challenges linked to the variability of RES and large-scale generation unit outages. In the future, the intrinsic flexibility of new electrical appliances will deliver new opportunities for end users, without adversely impacting their comfort levels.

By primarily consuming and storing electricity when it is abundant and re-injecting it back into the grid when needed, consumers will lower their energy bills whilst delivering benefits for the overall system: consumption peaks will be flattened, meaning flexibility will contribute to adequacy.

End user flexibility is therefore an important lever for improving the efficiency and affordability of the energy transition.

  1. Electrification reduces primary energy consumption levels whilst maintaining consumer comfort.

This significant efficiency improvement therefore delivers large benefits in terms of CO2 reduction – an effect that will become even more prominent as the share of renewable energy in the energy mix grows.

Electrification, combined with the accelerated integration of renewable energy into the system, creates the opportunity to reduce the consumption of fossil fuels. This, in turn, leads to significant reductions in direct domestic CO2 emissions.

In addition to these climate-related benefits, electrification will deliver economic and geopolitical advantages.

Industry will be given access to affordable electricity, meaning that it can be anchored in Europe, and jobs can be preserved. Moreover, the shift to an energy system with a high amount of renewables will make this system more independent and resilient.

  1. Any delay in unlocking flexibility or realising grid infrastructure will result in additional capacity needs.

If Belgium’s security of supply is to be achieved in the most (cost-)efficient way possible, investing in accelerated digitalisation is as important as investments in the timely build-out of grid infrastructure.

Accelerated digitalisation and the timely realisation of grid infrastructure will have a major impact on the volume of new capacities that need to be contracted in future CRM auctions. Further delays in implementing these will place Belgium’s approach to electricity policy in a state of constant crisis management.

If Belgium fully harnesses industrial and residential flexibility and realises its planned grid investments, capacity needs in 2034 will decrease by 3,000MW compared with a situation where these key moves are delayed.

Digitalisation covers both the necessary IT infrastructure and end-to-end connectivity between assets and service providers, which are linked to an adapted market design. Successfully implementing these will make the system more resilient in the face of electrification and renewable integration, will have a significant effect on CO2 reduction and will allow system costs to be kept under control.