Energy-intensive companies have been complaining for some time about the high electricity prices that undermine their competitive position. However, they do not pay much more than in Germany. In the Netherlands, prices for major industry are even higher. But compared to other economic blocks, European and Belgian energy prices are much too high.
Of the neighboring countries, it is mainly France that tries to attract industry with aggressively low rates. In particular, the investments that the steel company ArcelorMittal plans in the port of Ghent to become more sustainable gradually came to an end. France offered more attractive rates in the port of Dunkirk.
An amendment that was approved in the first reading in the House Energy Committee on Tuesday afternoon should now provide an answer to this. The scheme imposes a ceiling on transmission rates, the rates that companies pay for the transport of electricity over the high-voltage grid. These rates could therefore drop by 60-80 percent for the companies with the highest electricity bills, estimates Prime Minister Alexander De Croo (Open VLD).
There are two conditions attached to the arrangement. First, the energy regulators must conduct a study to determine whether energy-intensive companies really face a competition problem, says Energy Minister Tinne Van der Straeten (Green). That study, carried out by the consultancy firm PwC, is expected by mid-May. From a previous study, energy regulator Creg decided that it was too early to intervene.
In addition, the scheme only applies to energy-intensive companies that are also prepared to invest in the sustainability of their production.
Nuclear power plants
The decline is a signal to ArcelorMittal that Belgium is committed to keeping the steel company’s investments in its own country. “In combination with assured access to nuclear energy, this should enable our companies to remain competitive,” says De Croo. Van der Straeten is indeed still working on a plan to conclude a long-term contract (PPA) with the companies involved, under which the government will sell its share of the power production of Doel 4 and Tihange 3.
The cost of the ceiling is provisionally estimated at 125 to 160 million euros. That money is compensated by the federal budget and is therefore not recovered from other electricity consumers.
Vlaams Belang has requested a second reading, meaning the committee will have to discuss the amendment again next week. There is urgency involved as Parliament is dissolved on May 8 in the run-up to the elections. The proposal must be approved in order to intervene during ongoing cases.
With the current timing, this should still be possible. In any case, this political initiative will not deserve a beauty prize. The amendment was only tabled at the end, and then as an amendment to a bill that otherwise has nothing to do with it.
