Flanders to grant discounts to energy-intensive industries under renewables funding plans

04 January 2018 15:50 Source:ICIS

Energy-intensive industries in Belgium’s most prosperous region Flanders will be able to receive discounts on energy bills similar to other European countries amid fears of rising costs to fund renewable energy, the Flemish energy ministry said in a statement on Thursday.

Bart Tommelein, Flanders’ energy minister and one of the architects of Belgium’s Energy Pact, ceded to pressure from the petrochemical industry.

The industry was perturbed by the planned phase-out of nuclear power in Belgium in the 2020s and the prospects of funding renewable energy, which it said could hurt the region’s industrial competitive edge.

“The Flemish government is doing everything it can to safeguard the competitive position of the companies that require a great deal of electricity,” Tommelein said.

Flanders’ industries have been able to take advantage of Belgium’s relatively cheap nuclear power, covering around 50% of domestic power generation.

But the planned phase-out of the country’s two plants, Tihange and Doel, which total 5.9GW in installed capacity, could have significant ramifications on electricity prices and security of supply, industry associations and the national grid operator have warned.

Savings

Some exemptions already exist for the most energy-intensive industries, but the Flemish government said other countries in Europe, for example Germany, had more favourable exemption schemes which put Flemish industry on an uncompetitive footing.

As a result, the Flemish government on Thursday ushered in the new scheme under which companies can opt to deposit a percentage of their added value directly into an energy fund, depending on their energy intensity.

Energy-intensive companies for which energy accounts for more than 20% of costs will contribute 0.5% of the value that is added to their GDP.

If energy costs are below 20% of total costs however, companies will have to pay 4% of the value added to their GDP.

The Flemish energy ministry said a company with high energy intensity under the new system could save up to €1m a year, although the savings would be lower for most companies.

It added that companies with a lower energy intensity would probably benefit from staying in the old support mechanism, since their existing green energy contribution would almost always be lower.

Companies have until 15 July to choose a system and will have to pay the fee, which goes into the development fund, before 15 Nov if they opt for the new scheme. herman.moestue@icis.com

By Herman Moestue