Questions about the security of supply in Belgium
At the end of September 2018, Belgium had to cope with the sudden unavailability of several nuclear power plants. This unexpected, long-term unavailability of Doel 1, Doel 2, Tihange 2 and Tihange 3, until mid-December, means the loss of 3,000 megawatts (MW) of additional nuclear capacity. This corresponds to 25% of Belgium’s total controllable installed capacity. Over the coming winter, this will put the balance between supply and demand to the test.
The Belgian federal government has taken the initiative of setting up a task force led by Energy Minister Marie Christine Marghem to safeguard our country’s security of supply. As the operator of Belgium’s high-voltage grid, Elia is actively involved in this.
Who are the players on the electricity market?
In Belgium, a number of players have a role in organising the electricity market. Together, they ensure that the energy needs of Belgium’s companies and inhabitants can be met.
The federal government determines the overall energy supply policy.
Producers/suppliers undertake to meet their customers’ needs. They make sure that they have enough generation or import capacity to deliver on their commitments to their customers.
Access Responsible Parties (ARPs) are responsible for maintaining quarter-hourly balance between total injections and total offtakes by their customers. An ARP may be a producer, major customer, an electricity supplier or a trader.
The operator of the high-voltage grid (Elia) provides a reliable high-voltage system for electricity transmission within Belgium and for import/export operations with neighbouring countries. The system operator also ensures that production and consumption are always balanced – 24 hours a day, seven days a week.
Distribution system operators transmit electricity onwards to the SMEs, households and other end customers who are connected to their network.
Generally speaking, the composition of the country’s generation facilities is strongly influenced by national and European energy policy decisions.
Environmental goals and targets to reduce consumption by 2020 kick-started the rise of renewable energy sources. As a result, intermittent energy sources make up a growing share of Belgium’s generation facilities (currently, solar power accounts for around 3,200 MW of Belgium’s capacity, with wind power accounting for 2,600 MW). The intermittent nature of renewable energy sources makes them more difficult to predict, so they also constitute a challenge for the management of the electricity system.
In recent years, the operators of the country’s conventional power stations have indicated that they are having problems with the profitability of their facilities. As a result, many of these power stations are no longer available on the market.
The government adopted the law on phasing out nuclear power in 2003. This law has since been amended twice.
What is the composition of Belgium’s generation facilities?
- The service life of Tihange 1 (installed capacity: 962 MW) was extended by 10 years under the 2013 amendment.
- Doel 1 and Doel 2 (433 MW each) will remain open for a further 10 years, until 2025, following an amendment to the law in June 2015.
For winter 2017-2018, this means that the seven nuclear reactors are available, apart from scheduled and unscheduled unavailability.
An overview of available generating units during winter 2017-2018 can be found on the Elia website and on the ENTSO-E transparency platform.
However, the current status of its generation facilities means that Belgium is still structurally dependent on electricity imports from neighbouring countries, especially at times when solar and wind generation facilities produce little power.
What mechanisms and measures contribute to security of supply?
A number of tools and mechanisms are available to help electricity market players to maintain the balance between electricity generation and consumption at all times.
Generation forecasts for wind and solar power
Elia draws up forecasts (a bit like weather forecasts) for wind and solar power generation and shares them with the market. The market players can then use these forecasts, in addition to their own expertise and experience, to estimate how much additional energy they will need to inject into the grid to meet their customers’ needs.
Electricity imports and exports
Belgium’s grid is currently connected with France, the Netherlands and Luxembourg. This means that Belgium can import or export energy depending on conditions in Europe.
Belgium’s maximum import capacity is the maximum capacity the country can import under normal grid operation circumstances, i.e. without planned or unplanned unavailability of grid infrastructure (both in Belgium and in neighbouring countries) and without prior knowledge of energy flows. Since unforeseen events can happen at any time, this capacity is gradually made available to the market via annual, monthly, day-ahead and intraday auctions. In addition, capacity depends on the season and on maintenance work on the grid.
Thanks to the reinforcements of the northern border (project Brabo, phase 1) at the end of 2016, an import capacity of 4500 MW can be assumed for winter 2017-18 for Belgium.
The actual availability of an import balance of 4500 MW is essentially subject to two conditions:
- the market conditions for import are favourable;
- the grid operating conditions are normal.
- With regard to specific market conditions, international flows can result in a lower available import balance.
The balancing reserves and the strategic reserve
Elia has two different types of reserve:
- Balancing reserves, also known as the primary, secondary and tertiary reserves. These are specific contracts with certain producers, consumers and aggregators, under which generation by certain power stations or consumption by certain sites (mostly industrial) is increased and decreased when necessary. This enables us to resolve the remaining imbalance between generation and demand for electricity. These reserves are a key component to maintain an operational balance on the grid. .
- The strategic reserve, a concept that was introduced for the first time in winter 2014-2015. This reserve was created as a response to the structural generation shortage caused by power station shutdowns, and is intended to contribute specifically to guaranteeing security of supply in winter. Power stations making up the strategic reserve cannot participate in the market.
At the request of the Minister for Energy, Elia draws up a tender for each winter period, aimed at power stations that have announced their closure and major consumers. The reserve formed as a result of this tender procedure can be activated between 1 November and 31 March and is revised each year.
The available strategic reserve for winter 2017-2018 is 725 MW. The strategic reserve is activated when forecasts detect a potential generation shortfall, be it a few days or even a few hours in advance. The aim is to offset a predictable structural generation shortfall. This sets the strategic reserve apart from the usual balancing mechanisms based on the balancing reserves, since the balancing reserves are intended to address unexpected imbalances as they arise in order to maintain a balance in the Belgian zone at all times.
What measures has Elia taken to contribute to security of supply?
Elia is undertaking a number of projects to reinforce or expand its grid to help guarantee security of supply on a day-to-day basis and in the long term. These projects are part of the (federal and regional) development plans that Elia draws up to that effect. These projects will lead to more robust import capacity the can be made available to the market or to an increase in such capacity.
Elia is also optimising the availability of the high-voltage grid to further enhance security of supply. Some maintenance work has been brought forward and the grid is being thoroughly prepared for winter. Furthermore, agreements have been made with system operators in neighbouring countries.
How does Elia detect shortages on the market?
The potential risk of a generation shortfall in Belgium is analysed every day, as well as for the next seven days. A number of elements are combined to determine whether the risk is high:
- forecasts for generation from renewable energy sources;
- the most recent information that Elia has about the availability of conventional generation facilities;
- an estimate of potential import levels;
- forecasts for Belgium’s total electricity consumption.
These estimates are refined, using data which becomes more accurate as we move closer to the event. In addition, the risk of a power shortage is determined on the basis of hypotheses and forecasts, which means that we can never be absolutely sure that we can detect a power shortage (a long time) in advance.
What does Elia do if a shortage is announced?
If our analyses indicate that a power shortage is possible, the relevant authorities and the general public are informed through transparent communications on the Elia website. Elia’s Power Indicator app was designed for the express purpose of communicating about shortages – you can find it here.
An anticipated power shortage may also lead to the activation of the strategic reserves – either a day in advance, or on the day itself. Any such activation is announced on the Elia website. There are two mechanisms for activating the strategic reserves: the ‘economic trigger’ and the ‘technical trigger’.
The ‘economic trigger’ process takes place one day in advance, automatically coming into effect as soon as a power shortage is detected on the day-ahead electricity market or, in other words, as soon as the total demand for energy on the EPEX Spot Belgium exchange (formerly Belpex) exceeds the total energy supply. If this happens, EPEX Spot Belgium will assign an additional quantity of energy – supplied by the strategic reserves – to market players at the maximum price on the EPEX Spot Belgium day-ahead market (currently €3,000/MWh).
In addition to the ‘economic trigger’ process, the strategic reserve can also be activated for technical reasons at any time after 6.00 p.m. the evening before and on the day itself. This process is known as the ‘technical trigger’.
Activation of the strategic reserve does not mean that the load shedding plan will take effect. In fact, the strategic reserve is activated as an extra measure to prevent load shedding.
You can find more information about the strategic reserve here.
What measures does Elia take if there is nevertheless a power shortage?
If something happens that results in Belgium’s supply margins being considerably reduced or even reduced to zero, Elia will take a number of actions to address the situation:
- A request for additional control volumes will be sent to all the access responsible parties (ARPs). This enables Elia to draw on any remaining generation capacity at all the available power stations or on additional measures to control electricity consumption. Such requests are made via balancing warnings.
- If necessary, Elia will activate its contracted reserves. This may involve: activating specific, quick-starting gas-fired units; drawing on contracts with aggregators; reducing consumption by industrial customers in a controlled way, as agreed by contract; or seeking assistance from neighbouring transmission system operators.
- If the situation so requires, Elia will look into whether special actions can be taken, in coordination and partnership with other transmission system operators from the Central-West European region, to further increase Belgium’s potential import capacity.
- Belgium’s strategic reserves may be activated by an economic or technical trigger.
- If market mechanisms and the reserves are not enough to resolve the problem, the authorities decide to limit their electricity consumption. Awareness-raising measures, which may be coupled with bans, are put in place first to ensure that the grid remains balanced in the coming hours or days.
- Our last resort for avoiding a power shortage in Belgium is the controlled implementation of the load shedding plan.
These measures are not necessarily implemented one after the other – they may overlap or alternate.
Why and when does Elia apply the imbalance tariff of €4,500/MWh?
This €4,500/MWh tariff is only applied if the following conditions are met: the strategic reserves must have been activated and the existence of a structural shortage must have been confirmed in real time.
This tariff is applied to players on the wholesale electricity market (also known as Access Responsible Parties, or ARPs) who are not able to meet their customers’ demand for electricity (e.g. a supplier who is no longer capable of generating and/or purchasing enough electricity to supply customers). However, any market players who have an electricity surplus at that time are paid €4,500/MWh to make their surplus power available to market players who do not have enough, with Elia acting as a facilitator.
This mechanism – which forms part of the rules for the operation of the strategic reserve, as approved by the federal regulator (CREG) – is meant to encourage market players to make every effort to keep their portfolios balanced.
This ‘last resort’ tariff is also included in CREG's decision of 3 December 2015 approving Elia's amended tariff proposal. This ensures that it is in suppliers’ best interest to buy the energy they need to supply their customers, even if it is very expensive. When circumstances are very difficult, the energy price on the EPEX Spot Belgium exchange can get as high as €3,000/MWh.
This measure is intended to reduce the probability of load shedding.
This imbalance tariff is only applied to wholesale market parties (ARPs) and is not directly linked to the electricity price for end users. An imbalance tariff is applied in normal situations too (you can find the current tariff on the Imbalance prices page), but it is less than €4,500/MWh.
When does the load shedding plan take effect?
The load shedding plan is intended as a last resort, when all of the other mechanisms to ensure security of supply are not enough to meet the demand for electricity. The load shedding plan is actually an emergency plan and, like any other emergency plan, applies at all times – summer and winter, this year and in years to come. The plan only comes into effect as a last-ditch measure and involved disconnecting certain areas from the grid according to a targeted plan. This is done both to prevent grid collapse and to restore stability on the grid as quickly as possible, so that everyone has a power supply again.
Under known conditions and taking into the strategic reserves, import possibilities and measures to which Elia can revert in the event of an impending shortage, no activation of the load shedding plan is expected for the coming winter.
You can find the answers to any practical questions about the load shedding plan (e.g. information about a certain street, length of the interruptions, and communication in the event of load shedding) on the FPS Economy website.