INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries This pdf-file is for the personal use of the purchaser only. The information contained in it is subject to copyright by the OECD/IEA. This material is for sale; therefore, the User may not copy, republish, lend, post on any server (unless a multi-user licence is purchased for use on the intranet, in which case the multi-user license terms apply), use on Web sites, transmit or redistribute to any mailing lists any part of the material for commercial purposes, for compensation of any kind or simple dissemination. BELGIUM 2005 Review INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries BELGIUM 2005 Review INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-six of the OECD’s thirty member countries. The basic aims ofthe IEA are: • to maintain and improve systems for coping with oil supply disruptions; • to promote rational energy policies in a global context through co-operative relations with non-member countries, industry and international organisations; • to operate a permanent information system on the international oil market; • to improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use; • to assist in the integration of environmental and energy policies. The IEA member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, the Republic of Korea, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, the United States. The European Commission takes part in the work of the IEA. ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of thirty democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Commission takes part in the work of the OECD. © OECD/IEA, 2006 No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to: International Energy Agency (IEA), Head of Publications Service, 9 rue de la Fédération, 75739 Paris Cedex 15, France. TABLE OF CONTENTS 1 ORGANISATION OF THE REVIEW ........................... 7 2 SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS .... 11 3 GENERAL ENERGY POLICY ................................. 23 4 ENERGY AND THE ENVIRONMENT ......................... 53 5 ENERGY EFFICIENCY....................................... 69 6 RENEWABLE ENERGY ..................................... 89 7 OIL ...................................................... 107 8 NATURAL GAS ............................................ 119 9 ELECTRICITY .............................................. 143 10 NUCLEAR POWER ......................................... 173 11 TECHNOLOGY, RESEARCH AND DEVELOPMENT ............. 183 A ANNEX: ENERGY BALANCES AND KEY STATISTICAL DATA ....... 193 B ANNEX: INTERNATIONAL ENERGY AGENCY “SHARED GOALS” .. 197 C ANNEX: GLOSSARY AND LIST OF ABBREVIATIONS ............. 199 3 Tables and Figures TABLES 1. Belgium and its Regions in 2004 .................................. 23 2. Division of Energy Policy Responsibilities .......................... 26 3. New Electricity Market Structure ................................... 31 4. New Natural Gas Market Structure ................................. 32 5. Total Primary Energy Supply, 2002 and 2003 ..................... 34 6. Total Final Consumption by Source, 2002 and 2003 ............. 35 7. Projections of TPES by Fuel, 1990 to 2030 ........................ 38 8. Projections from Different Scenarios of TPES, 2000 to 2030 ..... 38 9. Projections of TFC by Fuel, 1990 to 2030 ......................... 39 10. Projections of Energy Intensity, 1990 to 2030 .................... 40 11. Projections from Different Scenarios of TFC, 2000 to 2030 ...... 40 12. Projections of Energy-related CO Emissions, 2000 to 2030 ...... 41 2 13. Energy Taxes in Belgium in 2005 .................................. 44 14. Energy Prices, 2000 to 2003 ....................................... 46 15. Regional Burden-sharing Agreement to Meet Kyoto GHG Commitment ........................................................ 54 16. Progress towards the Kyoto GHG Emissions Target by Region .... 57 17. Modelled Energy-related CO Emissions, 1990 to 2020 ........... 58 2 18. National Allocation Plan Allowances by Region and Sector ....... 62 19. Reductions Necessary to Meet the Kyoto Target ................... 64 20. Modelling Results of Energy Efficiency Using Three Different Scenarios, 1995 to 2020 ........................................... 71 21. Flanders’ Rational-Use-of-Energy Public Service Obligation Targets ... 83 22. Energy Savings from Rational-Use-of-Energy Public Service Obligation Efforts ................................................... 89 23. Renewable Electricity Capacity and Production in Wallonia, 2003 and 2004 ........................................................... 89 24. Projections for Electricity Production from Renewables in Wallonia, 2010 ................................................................ 92 25. Flanders Green Certificate Minimum Prices ........................ 96 26. Federal Green Certificate Minimum Prices ......................... 100 27. Primary Oil Consumption, 2000 to 2003 .......................... 109 28. Total Final Consumption of Petroleum Products, 1990 to 2003 .. 109 29. Projected Natural Gas Demand in Belgium According to the 2004 Ten-year Plan ........................................................ 119 30. International Connections to the Belgian Natural Gas Network .. 122 31. Natural Gas Market Roles and Responsibilities of the Federal and Regional Regulators................................................. 124 32. Natural Gas Consumption by Region, 2004 ....................... 124 33. Electricity Market Roles and Responsibilities of the Federal and Regional Regulators ................................................ 147 34. Progress of Electricity Market Opening in Belgium ................ 148 4 35. Results of Electrabel VPP Auctions ................................. 151 36. Length of Elia’s Transmission Grid .................................. 154 37. Market Share of Retail Suppliers in Flanders, January to June 2004 .. 160 38. Annual Residential Electricity Costs in Flanders, April 2005 ...... 165 39. Summary of the Nuclear Power Plants in Belgium ................. 173 40. Energy R&D Funding and Subsidies in Flanders, 1999 to 2003 .. 187 FIGURES 1. Map of Belgium ..................................................... 22 2. Nuclear Power as a Share of TPES and Electricity Generation, 2003 . 25 3. Total Primary Energy Supply in IEA Countries, 2004 .............. 33 4. Total Primary Energy Supply, 1973 to 2030 ....................... 34 5. Total Final Consumption by Source, 1973 to 2030 ................ 36 6. Total Final Consumption by Sector, 1973 to 2030 ................ 36 7. Sources of Energy-related CO Emissions, 2003 ................... 55 2 8. CO Emissions by Fuel, 1973 to 2003 ............................. 56 2 9. Energy Intensity in Belgium and in Other Selected IEA Countries, 1973 to 2010 ........................................................ 70 10. Energy Consumption per Capita in Belgium and in Other Selected IEA Countries, 1973 to 2010 ....................................... 70 11. Primary Energy Savings from Flanders’ RUE Public Service Obligation Efforts, 2003 ........................................................ 84 12. Renewable Energy as a Percentage of Total Primary Energy Supply in Belgium,1973 to 2004 .......................................... 90 13. Renewable Energy as a Percentage of Total Primary Energy Supply in IEA Countries, 2004 ............................................. 91 14. Renewable Energy Production in Flanders, 1994 to 2004 ........ 92 15. Flanders Green Certificate Market, 2003 to 2005 ................ 95 16. Flemish Green Certificates Prices and Quantity Traded by Month, 2002 to 2005 ...................................................... 97 17. Prices and Quantities of Green Certificates in Wallonia, 2003 and 2004 ................................................................ 99 18. Countries of Origin of Crude Oil, 2004 ............................ 107 19. Imports and Exports of Intermediate Products, 1979 to 2003 .... 108 20. Refined Product Production, 2004 ................................. 110 21. Refining Capacity Utilisation, 1995 to 2005 ...................... 111 22. OECD Unleaded Gasoline Prices and Taxes, Second Quarter 2005... 114 23. OECD Automotive Diesel Prices and Taxes, Second Quarter 2005 ... 115 24. Map of Natural Gas Transportation Network, 2004 ............... 121 25. Belgian Natural Gas Supply by Source, 2003 ...................... 122 26. Belgian Natural Gas Supply by Company, 2003 ................... 125 27. Fluxys Ownership ................................................... 129 28. Distrigas Ownership ................................................ 129 5 29. Domestic Natural Gas Prices in Belgium and in Neighbouring Countries, 2005 .................................................... 136 30. Industrial Natural Gas Prices in Belgium and in Neighbouring Countries, 2005 .................................................... 136 31. Seasonal Household Natural Gas Prices in Belgium and in Neighbouring Countries, 2001 to 2005 .......................... 137 32. Seasonal Industrial Natural Gas Prices in Belgium and in Neighbouring Countries, 2001 to 2005 ........................................... 137 33. Electricity Generation by Source, 1973 to 2030 ................... 143 34. Final Consumption of Electricity by Sector, 1973 to 2030 ........ 144 35. Peak Electricity Demand, 1998 to 2004 ........................... 145 36. Cross-border Electricity Exchange with France, the Netherlands and Luxembourg, 2004 ................................................. 146 37. Electrabel’s Generating Capacity by Source, 2004 ................ 150 38. Map of Belgium’s Transmission Network ........................... 153 39. Map of Belgium’s Cross-border Transmission Points and Capacity .. 156 40. Map of Major Planned Cross-border Grid Improvement Projects .. 158 41. Market Share of Retail Electricity Suppliers in Belgium, 2004 .... 161 42. Domestic Electricity Prices in Belgium and in Neighbouring Countries, 1991 to 2005 ....................................................... 163 43. Electricity Price Comparisons in Flanders, January 2004 to April 2005 .. 164 44. Electricity Price Components in Flanders and Wallonia, 2003 to 2005 .. 166 45. Ownership of Belgian Nuclear Industry ............................ 174 46. Federal Nuclear Policy Institutions ................................. 175 47. Schedule for the Phase-out of Nuclear Energy in Belgium ......... 176 48. Nuclear Safety Regulation .......................................... 178 49. Government Energy R&D Spending in Wallonia, 1999 to 2003 .. 189 50. Government Renewable Energy R&D Spending in Wallonia, 1999 to 2003 ............................................................. 189 6 ORGANISATION OF THE REVIEW 01 REVIEW TEAM The IEA 2005 in-depth review of the energy policies in Belgium was undertaken by a team of energy policy specialists drawn from IEA member countries. The IEA review team visited Belgium from 11 to 15 April 2005 for discussions with federal and regional energy administration officials, energy industry groups and non-governmental organisations. The team greatly appreciates the candour and co-operation shown by everyone it met. The members of the team were: Mr. Erik Johnsen (team leader) Mr. Robert Rush Price Deputy Director-General Administrator Ministry of Petroleum and Energy Nuclear Energy Agency Norway Organisation for Economic Co-operation and Development Ms. Cecilia Kellberg Deputy Director Mr. Daniel Simmons Ministry for Sustainable Development Natural Gas Expert Sweden International Energy Agency Mr. Antti Paananen Mr. Jun Arima Head of Unit Head, Country Studies Division Energy Market Authority International Energy Agency Finland Ms. Jolanka Fisher Ms. Helen Donoghue (Desk Officer for Belgium) Principal Administrator Administrator, Directorate-General Energy and Country Studies Division Transport, European Commission International Energy Agency Jolanka Fisher managed the review and drafted the report, with the exception of the chapter on natural gas, which was written by Daniel Simmons from the IEA’s Energy Diversification Division, and the chapter on nuclear power, which was written by Robert Rush Price of the Nuclear Energy Agency. Monica Petit prepared the figures and Bertrand Sadin prepared the maps. Marilyn Ferris and Viviane Consoli provided editorial assistance. 7 ORGANISATIONS VISITED The team held discussions with the following groups: (cid:2) Agoria, an organisation representing industrial customers (cid:2) BBL, an organisation representing Flemish environmental groups (cid:2) BFE, a retail electricity supplier (cid:2) BFP, the federal planning bureau (cid:2) BRAFCO, an organisation representing independent oil retailers (cid:2) CREG, the federal regulator for natural gas and electricity (cid:2) CWaPE, the Walloon energy regulatory commission (cid:2) Distrigas, a natural gas retail supplier (cid:2) Electrabel, a generator and retail electricity supplier (cid:2) Elia, the transmission system operator (cid:2) Essent, a retail electricity supplier (cid:2) Figaz, a natural gas industry association (cid:2) Fluxys, the natural gas pipeline network operator (cid:2) Luminus, a retail electricity supplier (cid:2) IBGE/BIM, the Brussels-Capital government administration for energy and the environment, which is also the regulator for natural gas and electricity (cid:2) Inter-Environnement, an organisation representing Walloon environmental groups (cid:2) Inter-régies, an organisation of public companies in the energy sector (cid:2) Federal Ministry of Public Health and the Environment (cid:2) Federal Public Service (Ministry) for Economy, SMEs, Self-employed and Energy (cid:2) Fédération Pétrolière Belge, an organisation representing major oil companies (cid:2) Ministry of the Flemish Community, Division of Natural Resources and Energy 8 (cid:2) Ministry of the Walloon Region (cid:2) Nuon, a retail electricity supplier (cid:2) SPE, a generator and retail electricity supplier (cid:2) Union Pétrolière Belge, an organisation representing independent oil companies (cid:2) VREG, the Flemish regulator for natural gas and electricity (cid:2) Wattplus, a retail electricity supplier REVIEW CRITERIA The IEA Shared Goals, which were adopted by the IEA ministers at their 4 June 1993 meeting in Paris, provide the evaluation criteria for the in-depth reviews conducted by the IEA. The Shared Goals are set out in Annex B. 9