The tension is palpable between Elia and Creg. This is what emerges from a new parliamentary commission surrounding the explosion in costs of the Princess Elisabeth energy island, now estimated at between 7 and 8 billion euros. The first is responsible for the construction of the island, the second is the federal regulator who must control that the amounts do not derail electricity prices. However, there is one certainty: this will impact the bills of households and businesses.
“We come away with more questions than answers.” This is the conclusion of federal deputy Jean-Luc Crucke (Les Engagés) at the end of a new parliamentary commission on the costs of the energy island. As a reminder, this island should ultimately allow no less than 13 TWh of electricity to be transmitted across the North Sea, including 3.5 GW of Belgian offshore wind power. Initially planned at 2.2 billion euros, the project was reassessed between 7 and 8 billion euros.
Additional cost confirmed
We still learned several things during this commission. Today, Elia does not dispute the figure calculated by Gregwho warned the Minister of Energy, Tinne Van Der Straeten (Groen), last May. Elia even made an assessment of the additional costs that could be endured by households and businesses on their bill.
First of all, you should know that the cost of the energy island had already been reassessed last year at 3.8 billion euros. This had already influenced electricity transmission rates for this year, by 0.8 euros per MWh. In 2030, during the peak, the additional cost was estimated at 2.7 euros/MWh. The new assessment shows an increase of 5 to 5.5 euros per MWh in 2032. For a household, with an average consumption of 3.5 MWh, this represents around twenty euros per year. Much more, for businesses.
A compensated increase?
Elia, however, puts this increase in costs into perspective. First, because electricity transmission, for which Elia is responsible, is only part of the electricity bill. Then, because Elia predicts that by 2032, the price of electricity could be influenced downwards, by 5 to 10 euros/MWh less than todayso the customer would come out a winner in the end.
It is nevertheless a forecast that the Creg, also present in committee, “doesn’t understand”not seeing how the small 3.5 GW of Belgian offshore wind production could have an influence on electricity prices on the European market. A market that is determined by the last unit of production with the highest marginal cost, which is usually a gas-fired power plant.
Furthermore, and even more serious, Greg says he has never received a quantified cost/benefit evaluation since the start of the project initiated in 2021despite his many requests.
“The initial project remains the most competitive”
En commission, Elia, however, explained in more detail the causes of the price increase. Starting with the inflation that followed the Ukrainian crisis, the increase in material prices and market effects. For this last point, the market is facing significant demand, particularly from Germany and the Netherlands. Supply cannot keep up: equipment manufacturers are overwhelmed with orders, which leads to equipment shortages and therefore price increases.
This market reality weighs particularly heavily on new technologies linked to direct current. The latter allows more electricity to be transported over a greater distance. And this is the biggest question surrounding the energy island: the network manager wants to bet on this technology, but the contract has not yet been signed, so that the envelope of 7 to 8 billion euros reserves maybe more surprises. Elia cannot speak out and defends herself by the need to maintain a certain confidentiality.
But whatever happens, Elia does not budge: he believes that his “Initial project remains the most competitive”, compared to other less ambitious scenarios for the energy island. “This is not a religious war of technologies,” insisted Frédéric Dunon, CEO of Elia Transmission. “The extension of nuclear power remains cheaper, but it is not a question of ‘or-or’ but of ‘and-and’: the transition to low-carbon energy production will necessarily involve an “energy mix” . By postponing the initial project, we would lose “5 years”, adds Mr. Dunon, “which means billions of euros in well-being”. Elia believes that the energy island at full capacity remains the best option in terms of price, security of supply and CO2 reduction objectives.
A statement that leaves Mathieu Bihet (MR) doubtful: “If in 2021, we had been told that the energy island would cost 7 billion euros, for a structure that does not produce electricity, would we not have made other choices?“, asked the MP, clearly targeting the procrastination surrounding nuclear power.
In the meantime, further cost assessments are underway. Particularly at the level of the direct current contract. An evaluation which is expected at the end of the year, while Elia planned to sign the contract at the end of November. This is one of the many questions in this file.
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