On February 8th 2021 a new tariff methodology has been published by the Flemish regulator (VREG).
This new methodology is applicable as of March 1st. Unless there are any delays or postponements*, new capacity distribution tariffs will be introduced in Flanders (Belgium) as of 01/01/2022.
Initially the tariff methodology for the regulation period 2021-2024 had been decided by the VREG on August 13th 2020 and modified for the first time on December 11th 2020.
On February 5th VREG decided to change the DSO** tariff methodology again. This latest change was following a decision made by the Constitutional Court, that revoked an earlier decision of the Flemish Government on the metering regime. This applied to customers that installed solar panels before 31/12/2020 and that would be equipped with a digital meter (and thus potentially loose the advantage of net metering).
This decision changes the structure of the distribution tariffs for high voltage (HV) and low voltage (LV) customers. In particular for LV customers, the distribution tariffs will change from 100% volume based (kWh) to mainly capacity based (kW).
Capacity Tariffs are introduced to:
The exact values of the new capacity tariffs have not yet been published.
Nevertheless the structure is known.
Tariffs will be proposed for different customer groups. These customer groups differ based on the voltage level, the type of connection and the type of meter.
For each of these groups the tariff will consist of different components that reflect different cost categories, see below for a breakdown:
Within the customer groups, all allocated costs will be charged to the customer based on tariff calculation units (KW, KWh, KVA, KVArh), resulting in the following tariff structures:
For HV and MV (medium voltage) Customers
For LV Customers
Precise impact calculations for the customers are still impossible to know as of yet. The exact values for the different customer groups (€/kW) for the measured peaks are still to be calculated and published.
Impact will however be mitigated/limited:
The regulator has published some preliminary simulations of the impact of the introduction of these new capacity tariffs. Typically, the impact will be most felt by customers with high peaks and low consumption such as owners of a second residence.
According to the VREG, for 60% of residential customers, distribution fees will either decrease or increase by no more than 10%.
For more than70% of SoHo ( Small Office Home Office) and SME (small medium enterprise) customers, distribution fees will either decrease or increase by no more than 10%.
For HT customers this percentage will be slightly above 50%, meaning that almost 50% of customers will see their distribution fees increase by more than 10%
Capacity tariffs can only be applied to customers with a digital meter. The roll out for Digital meters in Flanders, however, is not yet complete. This roll out will be 80% completed by 2024 and full roll out is only forecasted by 2029.
Therefore, customers with a classic meter will also pay a minimum “lump sum” capacity charge that is based on an assumed capacity of 2,5 kW.
Unlike the actual volume-based distribution tariffs, for the regulation period 2022-2024, the capacity tariffs will not be time dependent. However, VREG (Flemish regulator) asked the DSO to examine the need for time dependent tariffs and to issue a report on this by the end of 2023.
Theoretically, a capacity-based injection tariff could be a fair way to allocate the costs caused by injection to the concerned customers. It is however still unclear how such capacity-based injection tariffs would contribute to a more rational use of energy. Hence, for the tariff period 2022-2024 injection tariffs will remain volume based (c€/kWh).
Meanwhile the VREG has asked the DSO to examine the need for capacity-based injection tariffs by end 2023.
So far, only the principles and structure of the capacity tariffs for the period 2022-2024 are known. Lots of measures have been taken to mitigate impact of this on the customer’s bill.
Hence, major shifts in consumption behaviour are unlikely.
These behavioural changes, needed to avoid major investments in the grid capacity, will rather be induced by passing through the impact on the customer’s bill of the measured peak in the 2025-2028 tariff period.
* De Tijd - 12/03/2022 – The Flemish Energy Minister (Zuhal Demir) and Fluvius are in favour of postponing the introduction of the capacity tariffs. Fluvius asked to postpone this introduction by 6 months.
** DSO = Distribution system Operator , TSO = Transport System Operator
*** In Flanders by 2030, an estimated additional 700K Electric Vehicles, 145 K Heat Pumps and 200K Photovoltaic installations will likely cause an increase in the synchronous peak load form 5,8 to >9 GW. Therefore 800 – 1150 Mio€ investments in the grid will be necessary during the same timeframe.