Federal energy regulator CREG has approved the new transmission rates of high-voltage manager Elia. The regulator and the grid operator announced this on Tuesday. Due to the significant increase, by an average of 77 percent, families’ electricity bills will also increase.
Elia manages the high-voltage grid in our country. Because these are regulated activities, the grid operator can pass on the costs for that management in the rates for households and companies. It is up to the CREG to decide whether all these costs are justified.
Elia previously submitted a proposal, which has now been given the green light by the energy watchdog. This concerns the electricity transmission rates for the period 2024-2027. Elia has a lot of work and investments ahead of it in those years.
Due to the increasing electrification of our society – think of heat pumps and electric cars – there is a need for a strong high-voltage grid. The electricity consumption of companies alone will increase by half between now and 2030, Elia notes.
Elia will therefore invest billions in the coming years in, among other things, the new Ventilus and Boucle-du-Hainaut high-voltage lines. The costs for the energy island that is to be built off the coast in the North Sea are only partly included in the new rates.
6.4 billion euros of investments
In concrete terms, Elia will invest 6.4 billion euros in the grid in the period 2024-2027. That is a lot more than the 1.5 billion euros from the previous tariff period 2020-2023. These extra billions therefore translate into the higher rates that the CREG approved: an average of 77 percent extra over the rate period. There will be a significant increase, especially from 2025 onwards.
For consumers, higher rates mean a slightly higher bill. The CREG does point out that the approved tariffs are 10 percent lower than the Elia proposal, in order to keep costs manageable for households.
The total share of transmission costs in the electricity bill is currently limited to around 3 percent of the total bill and amounts to approximately 40 euros per year. By the end of the tariff period, another 40 euros would be added due to the higher rates. Elia itself specifically speaks of an impact on the bill of “on average between 2 and 3 euros” per month for the entire period. An increase is particularly noticeable from 2025 onwards.
We will get something in return, Elia notes. “These are big investments, but they will pay for themselves in just a few years. Moreover, the costs of postponement or delay would be many times higher,” the grid operator said. The economic benefits of the investments are estimated at 750 million to 1.2 billion euros per year.
Higher efficiency
Striking: the CREG also leaves an opening for a higher return on investments for the operator of the high-voltage grid. Elia has already pointed out several times that in the current climate of higher interest rates, higher compensation is needed to find capital on the markets. The CREG rejected an earlier proposal in this sense, but is nevertheless taking this into account in the new approved network rates.
In concrete terms, the regulator will organize a public consultation. There would be some kind of mechanism that would ensure a return in line with the market. The new rates have already taken the impact into account, based on a rough estimate.
