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Belgium 2016 Review Summary

Core Content

The Energy Policies of IEA Countries report for Belgium provides a comprehensive overview of the country's energy policy landscape, highlighting achievements, challenges, and recommendations for improving energy security, sustainability, and efficiency. The International Energy Agency (IEA) emphasizes the need for a long-term, coordinated, and transparent energy strategy that aligns with both EU and international commitments.

Main Energy Policy Challenges

• Electricity Security and Nuclear Phase-Out: Belgium's electricity generation is heavily reliant on nuclear power, which accounts for about 50% of its electricity supply. The planned phase-out of nuclear power plants by 2025 has raised concerns about electricity security, as the country lacks sufficient alternative baseload capacity. The IEA recommends reassessing the phase-out timeline to ensure affordability, security, and GHG reduction.

• Renewable Energy Development: Belgium has made progress in increasing its share of renewable energy, but the current support mechanisms are costly and inefficient. The country has a relatively high level of subsidies for renewables, particularly solar PV, which has led to overcompensation and excess demand. The IEA encourages more stable and predictable support systems.

• Climate Change Mitigation: Belgium needs stronger policies to reduce emissions in sectors outside the EU Emissions Trading Scheme (EU-ETS), especially transport and buildings. Current fiscal policies do not sufficiently incentivize the efficient use of transport and heating fuels.

• Energy Efficiency and Market Reforms: The country has not yet achieved its energy efficiency targets, and the existing price-capping mechanism in the retail market may hinder market responses and innovation. The IEA suggests abolishing this system and focusing on more targeted support.

• Oil and Natural Gas Security: Belgium has made strides in securing oil supplies through its stockholding mechanism, managed by APETRA, which meets IEA and EU obligations. However, the reliance on low-calorific gas from the Groningen field poses a risk, and the transition to high-calorific gas needs to be managed with greater urgency.

Key Recommendations

• Adopt a Long-Term Inter-Federal Energy Vision and Pact: The government should develop a comprehensive, long-term energy strategy that involves all political parties and stakeholders to ensure legitimacy and consistency.

• Follow Transparency, Predictability, and Regulatory Certainty: Energy policy should be designed with these principles in mind to support investment and market stability.

• Enhance Energy Supply Diversification and Demand Limitation: Focus on energy efficiency, renewable energy, and increased collaboration with neighboring countries to reduce reliance on fossil fuels.

• Address Electricity Capacity Shortages: Reassess the nuclear phase-out policy to ensure it is feasible and reasonable from the perspectives of electricity security, GHG mitigation, and cost.

• Reform Fossil Fuel Taxation and Subsidies: Abolish tax reliefs and subsidies for fossil fuels and replace them with more targeted support for vulnerable citizens and companies.

• Improve Road Pricing and Transport Fuel Taxes: Expand road pricing to other vehicle types and consider increasing transport fuel taxes in a revenue-neutral way to reduce fossil fuel use over time.

• Support Buildings Renovation and Decarbonisation: Increase the rate of building renovations to achieve cost-effective emissions reductions and promote non-fossil heating solutions.

• Strengthen Support for Renewable Energy: Create and maintain clear, stable, and predictable support systems for renewable energy to ensure continued growth and efficiency.

• Ensure a Smooth Transition to High-Calorific Gas: Assess the flexibility of the conversion process and consider a higher level of urgency in case the Groningen field's production declines faster than expected.

Key Information

• IEA Mandate: The IEA promotes energy security and provides research on reliable, affordable, and clean energy for its 29 member countries and beyond.

• Belgium's Energy Mix (2014):

  • TPES: 52.8 Mtoe (oil 42.3%, natural gas 23.9%, nuclear 16.6%, biofuels and waste 8.0%)
  • Electricity Generation: 71.5 TWh (nuclear 47.2%, natural gas 27%, biofuels and waste 7.9%, wind 6.5%, coal 6.2%, solar 4%, heat 0.5%, hydro 0.4%, oil 0.3%)

• Key Institutions:

  • APETRA: The oil stockholding agency that meets IEA and EU obligations.
  • Nuclear Safety Authority: Responsible for overseeing nuclear operations and safety.
  • Regional Governments: Have significant authority in energy policy, including climate and low-carbon strategies.

• EU and International Collaboration:

  • Belgium participates in the EU ETS and the Pentalateral Energy Forum.
  • The European Commission also collaborates with the IEA on energy-related issues.

• Energy Efficiency Targets:

  • Belgium has set regional targets, but the implementation has been inconsistent.
  • The country has a high energy intensity, indicating room for improvement.

• Renewable Energy Potential:

  • Belgium has good potential for offshore wind and biomass.
  • It should also focus on renewable heat and transport fuels.

• Fossil Fuel Prices and Taxes:

  • Belgium's fossil fuel prices are around the IEA median.
  • The country has a lower excise duty on diesel than on petrol, which is being addressed through reforms by 2018.

• Electricity Market:

  • The retail market is subject to a price-capping mechanism, which is being recommended for abolition.
  • Electricity market coupling in the CWE region has improved cross-border capacity utilization.

Conclusion

Belgium has made progress in energy policy, particularly in renewable energy development and oil stockholding. However, the country faces significant challenges in ensuring electricity security post-nuclear phase-out, improving energy efficiency, and reforming fossil fuel taxation. The IEA recommends a more coordinated, transparent, and long-term approach to energy policy, with a focus on diversification, sustainability, and market reforms.