Belgium will need gas until 2050 - NGW Magazine
This article is featured in NGW Magazine Volume 2, Issue 14
Belgium will need gas-fired power plants to balance the output from renewable sources, says the Belgian Electricity transport system operator Elia in its Energy Vision for 2050.
The federal and the regional Belgian governments still have to take some important decisions about the future energy mix, despite – or because of – the rise of renewables. “Elia wishes to make a reasoned contribution to the social debate on the future Belgian energy system,” says CEO Chris Peeters.
“The electricity grid is a driving factor behind economic growth and making our society sustainable by integrating increasing volumes of renewable energy. Clear and swift decisions need to be taken if we are to keep all our options open. It can easily take between five and ten years to construct new generating capacity and grid infrastructure. Such a period would take us up to the threshold of Belgium’s planned phase-out of nuclear power in 2025.”
At the Paris climate conference in 2015, Europe committed to reduce its carbon emissions by at least 80% by 2050. The European Commission estimates that, in order to achieve this target, renewables will have to account for between 64% and 97% of electricity generation by 2050.
In its Energy Vision Elia underlines its belief in a renewables-based electricity system integrated with the rest of the European Union. “In this system the full extent of our domestic potential is valorised and complemented – via interconnections – with affordable energy from the most efficient and sustainable resources abroad.”
Several European countries plan to decrease their coal fired power plants by 2030. There is also the gradual phase out of low-carbon nuclear plants. The combination of both will lead to an estimated 20% reduction in conventional generation capacity in Western Europe. “The transition towards a renewables-based system is facilitated by the reduction in total costs of renewables, made possible by technological progress,” it says.
Crucial as backup
“Storage of electricity is increasingly contributing to the management of the daily variability of renewables and the balancing of the system, but is not yet mature to manage the weekly or seasonal variability. Given the limited storage capacity and the intermittent nature of renewables, the contribution of conventional fuels to the energy mix still remains necessary for providing flexibility and keeping a role as a back-up, despite lower running hours. This conventional generation will highly likely come from gas-fired power stations that allow a quick start/stop to adapt to the variable nature of renewables, while maintaining a limited CO2 emission rate.”
In this view, natural gas is set to become the transition fuel, taking over other conventional fuels such as nuclear and coal in the European energy mix. “Gas-fired plants will play an important role for decades to come after the nuclear exit to ensure reliability,” says Elia.
According to Elia, Belgium’s own potential for domestic renewables will mainly be onshore and offshore wind and solar photovoltaics. Biomass – as long as the organic fuel used is sustainable – geothermal and hydro energy could contribute in lower volumes to decarbonisation. However, even exploiting to the full the potential of domestic renewable generation, the achievable decarbonisation will be limited by geography to a level below the potential of western Europe as a whole.
Concerning electricity from renewable sources, Belgium needs to leverage the energy policy choices made by other European countries. Many of them have a renewable potential that allows them to generate power exceeding their domestic demand. This excess energy can be imported to complement Belgium’s own generation, instead of overbuilding capacity without regard to the possibility of secure imports.
Gas replaces coal and lignite
In the vision report, Elia argues that gas fuelled power plants also contribute to sustainability in the short-term by replacing coal and lignite plants. Remarkably, the report doesn’t mention the geographical spread of those plants. As Belgium has no lignite or coal fired power plants any more, this statement must be taken as alluding to countries such as the Netherlands and Germany, which still use these fossil fuels. As more renewables are integrated, the share of gas fired plants in the energy mix will gradually diminish towards 2050.
Several studies concluded that a combination of more interconnection capacity in Europe, together with back-up capacity close to load centres, was the most cost-effective way to enable decarbonisation in a highly renewable energy system. Because of its position in a strongly interconnected Europe, Elia’s grid will play a key role. Moreover, the combined gas and electricity roundabout will give Belgian gas-fired power plants a prominent place within the European context. High interconnection levels will improve the market position of the most efficient plants.
Heating gains
Elia does not deal with the falling energy needs of highly energy efficient new and renovated buildings and only sees a minor role for geothermal energy and for the use of residual industrial heat in the energy mix. For distribution grid operators however, this is a hot item. Eandis, for instance, estimates the need of natural gas for household and commercial heating in its own catchment area to fall by a third by 2030.
In the northern federated state of Flanders, both the distribution grid operators, Eandis and Infrax, are pioneering the distribution of heat and they also have a keen eye on geothermal energy projects. Last year, they decided to create a daughter company for heat distribution which caused some criticism from politicians. The social democrats (SPA) in particular warned of the creation of a possible monopolist. This seems bizarre, as most SPA politicians set themselves up as champions of a complete merger between both companies. However, both themes are separate subjects.
Gas and electricity distribution are strictly regulated by Belgian law but heat distribution is not. Hitherto, if a project developer of a new neighbourhood wanted to construct a local heat grid, it would open a public tender for anyone to apply to, whereas building electricity or gas grids was the exclusive domain of existing grid operators. The Eandis and Infrax subsidiary has sent a proposal to all Flemish municipalities, to entrust it with the complete management of their public subterranean domain and some communities have already accepted.
Infrax replaces China
In the meantime, the Flemish government has approved the complete merger of Eandis and Infrax within Fluxys. The main motivation for the acceleration of this step was Eandis’ capital structure. After Engie was forced out and the State Grid of China prevented from becoming a new shareholder last year, Eandis saw its financial rating fall as it had to meet the cost of buying Engie’s shares.
Infrax never had a private partner, so it did not need this kind of money. The merger will soften Eandis’ – which is four times larger than Infrax – problem. The complex structures above both operational companies will alter, but even the new structures will be very complex. Flemish energy minister Bart Tommelein (liberal democrat) promised a holding structure, which will allow individual citizens to invest indirectly in the merger company and by doing so, to become co-owner of the gas, electricity and heat distribution grids. The Elia share already is on the stock exchange, just as gas transport operator Fluxys’ share is.
Gas fuelled heat production
The growing interest in heat distribution –an untraditional system in Belgium– doesn’t need to be an immediate threat for natural gas. New allocations that choose for heat aren’t obligated any more to create a gas distribution infrastructure. But until more renewable sources or longer (residual industrial or geothermal) heat transport pipes are available, most local heat grids fill be fed by gas fuelled local production units.
Dutch gas declines
A real problem will be the increasing decrease of import from Dutch gas, with the depletion of the Dutch natural gas fields and the Dutch political decisions to limit gas production. Today, Belgium is an important importer of Dutch natural gas. It also imports lesser quantities from other countries, mainly Norway, Qatar and the UK. The gas grids in the central part of Belgium are suitable for the low calorific Dutch gas; the grids near the coast and near the German border are suitable for high calorific gas from exporters.
As exports from the Netherlands diminish, so the central part of the Belgian grid system will have to be adapted, affecting about 1.6mn end-user connections at a cost of about €500mn. Starting from 2018, every year about 250,000 connections will be adapted. The Belgian federal government and the several regional governments have agreed this process will be state-financed from a national fund. The idea to work with a national fund, to spread the cost for one section of consumers across all gas users is not new and it was done in the early 60s when Belgium switched from town gas to natural gas.
However, while there is an agreement about its founding, there isn’t one about where the money will come from. Because in Flanders about 1mn connections need to be adapted and in Wallonia only 100,000, this can and probably will become a matter for new political discussions and even quarrels between the French and Dutch speaking Belgians.
Koen Mortelmans
This article is featured in NGW Magazine Volume 2, Issue 14