Elia, the manager of the high-voltage grid, will have to invest billions in the coming years to make the transition to an electrified society. Over the next four years, the network operator estimates the annual average costs at 1.35 billion euros, or 75 percent more than in previous years. Families will have to pay more, but the impact will still be limited, according to Elia.
Elia launched a public consultation with market parties on network tariffs on Tuesday evening. At the same time, Elia also creates more clarity about the investments the company is facing and the costs it has to charge for this. Ultimately, it is the federal energy regulator CREG that takes the final decision.
The federal watchdog already approved the tariff methodology last year. Now Elijah comes with a proposal. The high-voltage manager works in a regulated market in our country and is allowed to pass on the costs of the expansion of our high-voltage network in its tariffs. It is then up to the CREG to determine whether all those costs are justified.
6.5 billion in investments
What does Elia’s tariff proposal for the period 2024-2027 reveal? Well, the costs that should be covered by the tariffs are rising sharply: from an average of 760 million euros per year in the period 2020-2023 to an average of about 1.35 billion euros per year in this period. That is an increase of three quarters. A total of 6.5 billion euros in investments are on the agenda.
That is because Elia is at a “pivotal moment”, it sounds in the public consultation. There is an increasing demand for green electricity from households and companies, just think of electric cars and heat pumps. By 2030, the industry will demand 50 percent more electricity. All this also requires investments in the high-voltage grid. For example, the electricity produced by the offshore wind farms must be brought ashore, and that electricity must also reach the interior. An energy island must also be built at sea, for example to be able to import electricity produced elsewhere in the North Sea.
This translates into higher network tariffs, Elia acknowledges. “These are major investments, but they pay for themselves within a few years. Moreover, the cost price of postponement or delay is many times higher. Elia refers to the Netherlands, where some companies are no longer able to expand because too little has been invested in the grid in the past.
Elia’s tariff proposal would amount to an extra 2 to 3 euros per month for an average family, according to provisional figures. The total share of the transmission cost in the bill would increase, but remains limited to about 4 percent, says Elia.
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