Network investments will make electricity bills 82 euros more expensive next year, Minister Demir reacts furiously

The Flemish energy regulator VREG has prepared a proposal that will make electricity grid rates 82 euros more expensive for an average family next year. Flemish Energy Minister Zuhal Demir reacts furiously.

The Flemish energy watchdog VREG developed a proposed tariff methodology for the period 2025-2028. This provides for an increase in electricity grid rates next year. For an average family, the network rates will increase by 82 euros (+23%) compared to 2024.

Half of the increase can be attributed to the sharp increase in Elia network rates that had previously been knocked down. The rest of the increase (43 euros) is the result of the investments that Fluvius is making to prepare the Flemish distribution network for the arrival of more solar panels, electric cars and heat pumps.

In the VREG proposal, on which the sector is now being consulted, the biggest jump will occur next year, but electricity grid rates will rise even further in the years that follow. While an average family will pay 363 euros this year to use the electricity grid, those rates will rise to 445 euros in 2025 and to 471 euros by 2028.

The VREG predicts an even stronger increase for companies. For a company connected to the Fluvius medium-voltage grid, electricity grid rates will increase by 41 percent next year. With a consumption of 160 megawatt hours per year, the rates can increase from just under 6,300 to 8,900 euros in one year. 78 percent of this increase can be attributed to the higher Elia rates, it said.

Barely a few minutes after the VREG announced its proposal, Flemish Energy Minister Zuhal Demir (N-VA) reacted furiously in a press release. “Such an increase in the electricity bill is completely unacceptable and is at odds with the decrease in Flemish levies on the electricity bill in recent years,” says Demir. ‘I expect everyone involved to take the social impact of their decisions into account. If the new proposals lead to a higher electricity bill, this will also complicate the energy and climate transition.’

Pieterjan Renier, the CEO of the VREG, emphasizes that Fluvius is faced with major investments in the electricity grid to make the energy transition possible. ‘Fluvius must have the necessary financial space to make these investments in a timely manner,’ he says. ‘This will lead to higher network rates in the coming years. We are aware that energy is an important expenditure item for households and businesses, so we are careful to keep this increase to a minimum.’

Elia plans to invest 9.4 billion euros in strengthening the Belgian high-voltage grid by 2028, amounts that will have to be recouped through grid tariffs. Fluvius has an investment plan of 11 billion euros by 2033 on the table. In addition, due to the increased interest rates, regulators are forced to allow grid companies to make higher margins in order to be able to offer investors a market-based return. While an average capital return of 3.5 percent was permitted at Fluvius between 2021 and 2024, the VREG now projects a margin of 5.4 percent, which may change year after year.

Fluvius says in a response that it will analyze the VREG proposal in the coming weeks with a view to the investment plans. “We are entering a new era in distribution network management: as a network operator and as a society, we must ensure that the necessary adjustments and reinforcements of the distribution networks can be sufficiently financed and carried out in a timely manner,” says spokesperson Björn Verdoodt. ‘The future comfort of Flemish families and the strength of the Flemish economy depend on this.’

While the electricity grid is being fully expanded, investments in natural gas have been reduced to the minimum level, causing rates to drop slightly. According to current proposals, an average family that heats with gas will pay 224 euros in gas network rates in 2025, 21 euros less than in 2024 (-9%). The VREG does indicate that Flanders will have to consider how the costs will be distributed if the gas network will gradually be used less in the coming decades. Otherwise, there is a risk that billions in investments in pipelines will no longer be recouped in time and the last users of the gas network will pay for it.