annual report 2010 - CREG

COMMISSION FOR ELECTRICITY AND GAS REGULATION

ANNUAL REPORT 2010

TABLE OF CONTENTS 1. Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. Main developments on the electricity and natural gas markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.1. Wholesale market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.1.1. Developments with regard to market concentration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.1.2. Regional integration of the market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.1.3. Development of electricity and gas exchange platforms . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.1.4. CREG activities aimed at promoting competition on the wholesale market. . . . . . . . . . . . . . . . . . 7 2.2. Retail Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3. Public service obligations and consumer protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.3.1. Putting in place the federal mediation service for energy. . . . . . . . . . . . . . . . . . . . . . . . . 8 2.3.2. CREG duties relating to disputes settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4. Infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4.1. Price trends in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4.2. Investments in the transmission system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.4.3. Capacity allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.5. Security of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.5.1. Powers of the CREG in terms of security of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.5.2. Development of investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.5.3. Development of supply/demand balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2.5.4. Diversification of sources and routes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.6. Regulation/Unbundling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.6.1. Powers of the CREG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.6.2. Role of TSOs on the markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.6.3. Development of unbundling of TSOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.7. Transposition of the third legislative package . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.8. General conclusions regarding the legal framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

3. Regulation and functioning of the electricity market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3.1. Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.1. Management and allocation of interconnection capacities and congestion mechanisms . . . . . . . . . . A. Regional and bilateral developments . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Market results on interconnections . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Infringement proceedings against Belgium . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.2. Regulation of transmission and distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A. Transmission and distribution tariffs . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Maximum prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Ancillary services and balancing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. General terms and conditions of Access Responsible Party contracts . . . . . . . . . . . . . . . . . 3.1.3. Effective unbundling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2. Competition aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1. Description of the wholesale market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A. Electrical power demand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Electricity supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Wholesale generation market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Energy exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E. Mergers and acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F. Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2. Measures aimed at preventing abuse of a dominant position . . . . . . . . . . . . . . . . . . . . . . .

16 16 16 17 19 19 19 27 27 29 29 31 31 31 32 32 36 38 38 41

4. Regulation and functioning of the natural gas market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

4.1. Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1. Management and allocation of the interconnection capacity and congestion mechanisms . . . . . . . . . . 4.1.2. Regulation of transmission and distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A. Transmission and distribution tariffs . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Maximum prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Code of conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Transmission model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E. Indicative transmission programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . F. Standard connection contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.3. Effective unbundling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 48 49 49 52 53 53 55 56 56

4.2. Competition aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 4.2.1. Description of the wholesale market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 A. Natural gas supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 B. Holders of a natural gas supply permit . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 C. Natural gas transmission permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 D. Exchange platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 E. Integration with intra-European regions and neighbouring member states. . . . . . . . . . . . . . . . 61 F. Integration between gas producers/importers and suppliers – long-term gas supply contracts . . . . . . . . . 62 G. Access to natural gas storage facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 62 H. Developments in terms of market concentration . . . . . . . . . . . . . . . . . . . . . . . 63 I. Mergers and acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 J. Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 4.2.2. Measures aimed at preventing any abuse of a dominant position . . . . . . . . . . . . . . . . . . . . . 65

5. Security of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67

5.1. Electricity . . . . . . . . . . . . . . . 5.1.1. Demand . . . . . . . . . . . . . 5.1.2. Generation . . . . . . . . . . . . 5.1.3. Transmission grid infrastructures . . 5.2. Gas . . . . . . . . . . . . . . . . . . 5.2.1. Demand . . . . . . . . . . . . . 5.2.2. Supply . . . . . . . . . . . . . . 5.2.3. Measures in emergency situations . 5.2.4. Investment . . . . . . . . . . . . 5.2.5. Security of supply standards . . . .

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68 68 68 70 71 71 73 74 75 76

6. The CREG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

6.1. The assignments of the CREG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2. The Bodies of the CREG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.1. The General Council. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2. The Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3. General policy plan and comparative report on the objectives and achievements of the CREG. . . . . . . . . . . 6.4. Cooperation with other bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.1. The CREG and the European Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.2. The CREG and ACER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.3. The Madrid Forum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.4. The Florence Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.5. The London Forum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.6. The CREG within CEER and ERGEG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.7. The CREG and the regional regulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.8. Handling questions and complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.9. Participation of CREG members as speakers at seminars . . . . . . . . . . . . . . . . . . . . . . . . . 6.5. The CREG finances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.1. The federal contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A. The federal contribution for gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. The federal contribution for electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.2. The funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.3. The accounts for 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.4. The company auditor’s report on the financial year closed on 31 December 2010 . . . . . . . . . . . . . . 6.6. List of acts of the CREG during the year 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78 78 78 82 84 84 84 84 85 86 86 87 88 89 90 91 91 91 91 92 94 97 98

LisT of tables 1 Average import/export capacity and average nomination per year (MW) . . . . . . . . . . . . . . . . . . . . . . 2 Annual revenues from capacities offered for auction (in millions of euros) . . . . . . . . . . . . . . . . . . . . . 3 Congestion rents on coupled electricity exchanges per type of player (in millions of euros). . . . . . . . . . . . . . 4 Trend in the cost price for the transmission of electricity depending on the voltage, excluding surcharges and VAT . . . 5 Tariffs for the use of the distribution network in 2008, 2009 and 2010 (in €/kWh), excluding VAT. . . . . . . . . . . . . 6 (Unweighted) average price of imbalances during the period 2007-2010 . . . . . . . . . . . . . . . . . . . . . . 7 Net supplies to customers connected to the federal transmission system for the years 2007 to 2010. . . . . . . . . . 8 Wholesale market shares in electricity generation capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Wholesale market shares in power generated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Energy exchanged and average price on the Intraday exchange. . . . . . . . . . . . . . . . . . . . . . . . . . 11 Breakdown of exchanges on the Day-ahead hub. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Breakdown of exchanges on the Intraday hub. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Tariffs for the use of the distribution network in 2008, 2009 and 2010 (in €/kWh), excluding VAT. . . . . . . . . . . . . 14 Companies operating in the supply of natural gas on the Belgian market in 2010 . . . . . . . . . . . . . . . . . . . 15 Market shares on the transmission system from 2007 to 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Power demand and peak capacity demand in Belgium during the period 2007-2010. . . . . . . . . . . . . . . . . . 17 Breakdown of the installed capacity per type of power station connected to Elia’s grid, per type of power station, as at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Breakdown of power generated per type of primary energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Breakdown per sector of the Belgian demand for natural gas between 2001 and 2010 (in TWh) . . . . . . . . . . . . 20 Existing tools in the event of an emergency situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Members of the General Council as at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Directorates and staff of the CREG as at 31 December 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Overview of presentations given by the CREG in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Shortfalls recorded in the funds in 2010 (€) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Income statement as at 31 December 2010 (€) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Balance sheet as at 31 December 2010 (€) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 18 19 20 23 28 32 33 33 37 37 37 51 59 63 68 68 68 71 75 81 83 90 91 95 96

List of figures 1 Availability and use of interconnection capacity from 2007 to 2010 . . . . . . . . . . . . . . . . . . . . . . . . . 2 Average composition of distribution cost in Flanders in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Average composition of distribution cost in Wallonia in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Average composition of distribution cost in Brussels in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Structure of Eandis in 2009-2010 on the basis of the shares per DSO in Eandis . . . . . . . . . . . . . . . . . . . . 6 Structure of Infrax in 2009-2010 on the basis of the shares per DSO in Infrax . . . . . . . . . . . . . . . . . . . . 7 Structure of Ores in 2009-2010 on the basis of the shares per DSO in Ores . . . . . . . . . . . . . . . . . . . . . 8 (Unweighted) average price of imbalances and Belpex DAM price during the period 2007-2010 (in €/MWh) . . . . . . 9 Shareholding body of Elia as at 31 December 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Average consumption on a monthly basis in the Elia control area for the 2007 to 2010 period (in MWh/h) . . . . . . . . 11 Average price on the Belpex, APX and EPEX FR exchanges between 2007 and 2010 (in €/MWh). . . . . . . . . . . . 12 Average monthly resilience of the Belpex market in 2007-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Trend in average all-in price for electricity in 2009-2010 (in €/MW). . . . . . . . . . . . . . . . . . . . . . . . . 14 Shares of the various components of the electricity price for Gaselwest-Electrabel household customers in 2010 . . . . 15 Trend in total electricity price – household customers (Dc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Trend in the price of energy per supplier – household customers (Dc) . . . . . . . . . . . . . . . . . . . . . . . 17 Trend in the energy price per supplier – business customers, average voltage (Ic1) . . . . . . . . . . . . . . . . . 18 Breakdown of the price of electricity in Brussels, Paris, Berlin, Amsterdam and London – June 2010 (€) . . . . . . . . 19 Average composition of distribution cost in Flanders in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Average composition of distribution cost in Wallonia in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Average composition of distribution cost in Brussels in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Shareholding body of Fluxys as at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Breakdown of supply per entry zone in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Composition of aggregated supply portfolio of suppliers operating in Belgium in 2010 . . . . . . . . . . . . . . . . 25 Natural gas supplies by type and length of contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 IGH-Electrabel household customer – 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Trend in total natural gas price – household customers (T2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Trend in energy price per supplier – household customers (T2) . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Energy price trend per supplier – business customers (T4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Development of the natural gas consumption per sector during the period 1990-2010 (1990=100), corrected for climate changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Breakdown per sector of the Belgian demand for H-gas and L-gas in 2009 and 2010 . . . . . . . . . . . . . . . . . 32 Forecasts demand for natural gas in Belgium until 2020 (GWh, normalised t°, H+L) . . . . . . . . . . . . . . . . . . 33 Market shares on the transmission grid in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 23 23 24 25 25 25 29 30 31 36 37 38 38 39 39 40 44 51 51 51 57 58 58 62 63 64 64 65 72 72 73 74

COMMISSION FOR ELECTRICITY AND GAS REGULATION

ANNUAL REPORT 2010

1. Foreword The year 2010 was marked by a number of significant developments both as regards the electricity and natural gas markets and as regards the CREG. At European level, last year saw the drafting by the European Commission of interpretative notes on the third legislative package so as to guide member states when transposing this package into their national legislation. The CREG took a proactive approach to this matter, by providing the Belgian authorities, in complete transparency, with draft texts so as to apply the provisions of the third package into Belgian law as well as possible. The main objectives of the two directives and three regulations that make up this third package are identical to those of the CREG: to improve the operation of the electricity and natural gas markets by increasing transparency in network and supply activities, reinforcing the rights of consumers, and vulnerable consumers in particular, supporting cooperation and coordination at European level between network operators, regulators and member states, and finally, by strengthening the independence and powers of the national regulators. This transposition into Belgian law must be undertaken in accordance with European rules, in the general interest and in particular in the interest of consumers. It is a matter of avoiding a situation in which Belgium, as has happened in the past, becomes the subject of infringement proceedings owing to the incorrect or insufficient transposition of European legislation in the field of electricity and natural gas. One of the main thrusts of the third legislative package also concerns the separation of energy production and supply activities on the one hand from network activities on the other, also known as unbundling. In this area, Belgium ranks among the leaders in Europe. Over the past year GDF SUEZ, via Electrabel, sold its stake in the electricity and gas TSOs, Elia and Fluxys. With regard to the distribution of electricity and gas, Electrabel has confirmed its intention to reduce or even ultimately sell its stake in the mixed network operators. In Belgium, the CREG fulfilled the assignments it has been entrusted with by federal and European law, on the one hand to advise the public authorities on matters concerning the organisation and operation of the electricity and natural gas markets and on the other hand to supervise the market and monitor the implementation of applicable laws and regulations. Last November, one of the highest courts in Belgium, the Constitutional Court, confirmed the independence and autonomy of the CREG. It also stated that this autonomy is not compatible with the submission of the federal regulator to hierarchical control or administrative supervision. However, the CREG has a duty to be transparent in the action it takes and must be able to justify its decisions before Parliament, which exercises democratic control over each federal body in the country, however independent it may be. The efforts made by the CREG over a number of years were rewarded by the adoption at the start of 2011 of its proposal for a Royal Decree on the code of conduct governing access to CREG Annual report 2010

3

1. Foreword

the gas transmission system, the storage facilities and the LNG facilities. This code will make a substantial contribution towards reinforcing competition and improving the operation of the gas market in Belgium, as it provides for the abolition of the distinction between transit from border to border and transmission for Belgian consumption, the implementation of new rules on congestion and the secondary capacity market, as well as the improvement of transparency on the gas market. The CREG has also adopted a proactive attitude with regard to the government and federal Parliament in the debate on the calculation of the profit generated by the operation of Belgian nuclear power stations. On the basis of data provided by the electricity producers, the CREG has delivered an estimate of this profit which is the most accurate established to date in Belgium by an authority. Numerous reports, studies, opinions, proposals and decisions were drawn up by the CREG in 2010. The most important of these concern the opinion on the ten-year development plan for Elia’s grid, the comparison of electricity prices in Brussels and in neighbouring capital cities, the analysis of the quality of the electricity price indexation parameters, the examination of the fixed price and variable price contracts offered by suppliers to household consumers, the analysis of the contracts concluded between electricity suppliers and major industrial consumers, and the monitoring of the relationship between the costs and the selling prices of the gas supplied to Belgian consumers. Some of these acts may be compared to a spotlight trained on a particular aspect of the electricity and gas markets to reveal a dysfunction hitherto little known or unknown to most of the market players and public authorities. This confirms that it is vitally important for Belgium to have a strong and independent regulator on a liberalised electricity and gas market. Reading this 2010 annual report, readers will note that the structure of the table of contents differs significantly from that used in previous years. The new structure, based on the report which the CREG sends to the European Commission in July every year, already partly anticipates the reporting obligations imposed by the third package on European regulatory authorities. Chapter 2 of this report reviews the main developments that occurred on the electricity and natural gas markets. Readers will find a summary of the main elements that occurred in 2010 here, while the following chapters cover each element in more detail.

François Possemiers Chairman of the Management Board April 2011

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CREG Annual report 2010

2. Main developments on the electricity and natural gas markets


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This chapter provides an overview of the main developments that have occurred on the Belgian electricity and gas markets. Some of the items are covered in greater detail in Chapter 3 with regard to electricity and Chapter 4 with regard to natural gas.

2.1. Wholesale market 2.1.1. D evelopments with regard to market concentration Electricity As regards supplies to major customers connected to the federal transmission system1, the market share of Electrabel was estimated at around 88.7%, up approximately 1.1 percent compared with 2009. The total volume of energy taken up by end customers from the federal transmission system rose by almost 11% in 2010, increasing from 12,332.8 GWh in 2009 to 13,714.0 GWh in 2010. Two access points on the federal transmission system changed supplier in 20102. As regards the production market, the dominant position of Electrabel clearly declined during the course of 2010, although it still remains very strong. The HHI3 of the production market amounted to approximately 5,380 in 2010. Natural gas In 2010, a total of fourteen supply companies operated on the Belgian market. Total natural gas consumption rose to 215.3 TWh, an increase of 10.9% compared with consumption in 2009 (194.2 TWh). The merger between GDF and SUEZ and the fulfilment of the conditions imposed by the European Commission further to the approval of the merger in 2008 had a significant impact on the development of the market in 2010 and in particular on the market shares of Distrigas and GDF SUEZ on the gas transmission market. With a 52.1% market share however, Distrigas still remained the dominant player in 2010.

2.1.2. Regional integration of the market

Belgium again imported electricity on an annual basis in 2010, albeit only on a very small scale. Until 8 November 2010, the markets were coupled via Trilateral Market Coupling (TLC), involving Belgium, France and The Netherlands. On 9 November 2010, the market coupling was extended to cover the Central West Europe region (CWE), which means that the Belgian daily market is now coupled, on the basis of implicit auctions, with France, Germany, Luxembourg and The Netherlands. Via Interim Tight Volume Coupling (ITVC), also launched on 9 November 2010, the CWE region is also coupled with the Scandinavian market by means of a mechanism based on volumes (Volume Coupling). Natural gas Belgium occupies a strategic position as a hub in the natural gas systems of the North West region. This position is reflected in the large number of interconnections with adjacent networks and the volumes of gas brought in for international transit and local supplies. Whereas in previous years, congestion with regard to the supply of entry capacity at the Eynatten and ‘s Gravenvoeren interconnection points remained an issue, this was overcome in 2010 thanks to the additional investments made. In this respect, the introduction of the two-directional flow at the Zelzate entry point and the reinforcement of the eastwest axis by means of the rTr2/VTN2 project rank among the most striking achievements. In doing so, the main requirements were of course taken into account, but the market is not yet fully integrated. Further investments will be required to be able to integrate the Belgian grid into the process of European harmonisation. Cooperation with neighbouring countries in investment projects had already become a common practice through coordinated investment projects (Open Seasons). In 2010, all these projects gave rise to a final decision on a coordinated cross-border investment. Plans for implementation have been put in place. Amongst other things, this success has led to regional cooperation becoming an obligation in accordance with the new European regulations. In the future, cooperation within the north-west regional initiative will therefore have to take on coordination and intensive follow-up duties

Electricity Having exported electrical power on an annual basis in 2009 for the first time since the liberalisation of the market,

Moreover, a new European survey has shown that - as with the Belgian experience - the mechanisms for capacity allocation and the principles governing the management of

1 Grids with voltage in excess of 70 kV. 2 Source Elia (provisional data, January 2011). 3 The HHI index (Herfindahl-Hirschmann Index) is a commonly accepted measurement of the market concentration. It is calculated by squaring the market share of each company competing on a market and adding up the figures obtained.

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congestion at grid connection points are, on the whole, not at all harmonised. Local and/or national markets continue to be unduly organised along their own lines. This is why it was recognised in 2010 that better structured cooperation was needed to achieve market integration, at the very least with regard to the form to be taken on by a unified, integrated market. This entire process requires a clear framework within which progress can be made stage by stage towards a final model.

The wholesale markets such as the exchanges and hubs, on which gas and electricity are traded among producers and traders, are playing an increasingly important role in determining the prices paid by end customers. Cross-border issues therefore also require cross-border surveillance. In this respect, the Agency for the Cooperation of Energy Regulators (ACER) is to work closely with the national regulators, who are also responsible for investigating any anomalies observed and for imposing penalties, if and when required.

To define this target model, a discussion forum was set up at the initiative of ERGEG at the end of 2010. The position of all stakeholders will be heard and analysed by conducting workshops and external studies. Final conclusions are expected in 2011.

2.1.4. CREG activities aimed at promoting competition on the wholesale market

2.1.3. Development of electricity and gas exchange platforms

In this context, as regards electricity, the Management Board specifically focused on the regional integration of the markets, the operation of the Belpex Day-Ahead Market, the nuclear issue and the prices charged to end customers.

Electricity In 2010, the coupling of the Day-Ahead markets between Belgium (Belpex), The Netherlands (APX) and France (EPEX FR) once again proved successful: in fact, the three markets seldom operated in total isolation from one another. Belpex and EPEX FR were coupled 87% of the time, Belpex and APX 73% of the time. Belgium was isolated from the other two markets for just 1.2% of the time. The daily congestion rents amounted to a total of € 33.3 million in 2010. Natural gas At national level, activity on the APX Gas ZEE gas exchange remains very limited: 75 transactions were recorded there in 2010. This observation also means that the OTC trade (over the counter) at the Zeebrugge hub remains the central element of the trade in Belgium.

In 2010, the CREG continued to undertake permanent monitoring of technical aspects and tariffs on the electricity and natural gas markets.

As regards natural gas, the Management Board concentrated mainly on the regional integration of markets, promoting liquidity on the wholesale market (by means of additional investments and a plea for better support for the Zeebrugge hub), the development of a competitive regional market for low-calorific natural gas and the issue of costs and prices. In addition, the CREG worked with the Competition Council. Several members of staff from the CREG contributed to a number of Competition Council dossiers as experts.

2.2. Retail Market Price trends Electricity

Even though in 2010 the total volume traded at this hub reached a similar level to that of 2009, a significant increase in liquidity was observed. Moreover, new developments in the field of the regulations governing hubs and exchanges are gathering speed at European level. In this context, the CREG has taken on a leading role in the drafting of the ERGEG 2010 report on the monitoring of natural gas hubs4. It has also been closely following the proposal from the European Commission for a new European regulation on the integrity and transparency of the energy market (REMIT)5.

Prices billed to end users continued to rise in 2010. This increase may be attributed to the way in which supply price parameters developed. In addition, as regards the Flemish Region, the unit price of the free kWh fell, with the result that the discount for Flemish customers was smaller. Moreover, the increase in the quotas to be supplied with regard to the green certificates is resulting in a bigger contribution for renewable energy and cogeneration. Finally, the federal electricity contribution has increased.

4 Monitoring Report 2010 on the regulatory oversight of natural gas hubs (http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS_ERGEG_PAPERS/Gas/2010/E10GMM-11-03%20Gas%20Hub%20Monitoring%20Report%202010_final.pdf). 5 Proposal COM(2010)726 final for a Regulation of the European Parliament and the Council on energy market integrity and transparency, 8 December 2010.


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Natural gas

Trend in electricity distribution tariffs

Prices billed to end users continued to rise in 2010. This increase may be attributed to the increase in the price of energy linked to the trend in commodity prices. This increase is partly offset by the reduction in transmission tariffs and the fall in the federal contribution and the protected customer surcharge.

The 2009-2010 trend was considerably flatter than that between 2008 and 2009 and may be attributed mainly to the application of an indexation mechanism to the manageable costs and to a lesser extent to the trend in other elements, such as depreciation and non-manageable costs (public service obligations for instance). In 2010, imposed tariffs were billed for two Walloon DSOs (Tecto and Wavre) and for the «pure» (i.e. whose capital is held only by public sector authorities) Flemish sector (Infrax West, Inter-Energa, Iveg and PBE). These are based on the most recent corresponding total revenue elements approved, i.e. the tariffs for the 2008 operating year.

2.3. P ublic service obligations and consumer protection 2.3.1. P utting in place the federal mediation service for energy

Trend in all-in electricity price Although the procedure for appointing the French-speaking federal energy mediator is still ongoing, the energy mediation service6 has been operational since 10 January 2010. This service is qualified to deal with any disputes between an end customer and an electricity or gas company and deal with requests and complaints concerning the operation of the electricity and gas market.

Prices charged to end users rose in August 2010 compared with December 2009. This rise is due mainly to the trend in supplier price parameters. A substantial increase in the federal contribution and ‘renewable energy’ and ‘cogeneration’ contributions is also seen. Trend in natural gas transmission tariffs

In the context of the cooperation between this service and the energy regulators, the CREG has analysed a number of complaints received by the mediator from end customers.

2.3.2. C REG duties relating to disputes settlement To date, it has not been possible to take up the new duties assigned to the CREG in 2009 with regard to dispute settlement, which provide for the creation within the CREG of a Mediation and Arbitration Service and a Litigation Chamber (cf. 2009 Annual Report, p. 57). In fact, as at 31 December 2010 the implementing decrees required for this purpose had not yet been promulgated.

2.4. Infrastructure

The new multi-annual tariffs for the transmission, transit and storage of natural gas came into force in January 2010. These tariffs, which result from an agreement between the CREG and Fluxys, are valid until 31 December 2011. The agreement also provides for stable tariffs until 2015. Moreover tariff predictability has been integrated in the longer term7. The entry/exit tariffs (transmission and transit) have been set in accordance with current European legislation, using a methodology underlying the calculation of the tariffs which is based on costs and applicable both to the transmission of natural gas intended for the Belgian market and transmission from border to border. Equivalent principles have been applied to determine storage tariffs. These new transmission tariffs for Belgian consumers resulted in a 28% drop in tariffs compared with 2009.

2.4.1. Price trends in 2010 Trend in electricity transmission tariffs As the tariffs charged for the use of the transmission system and ancillary services are multi-annual tariffs which have been approved for the whole of the 2008-2011 regulatory period, they remained unchanged compared with 2008 and 2009.

The (indexed) tariffs for the use of the liquefied natural gas terminal remain unchanged. Trend in natural gas distribution tariffs The 2009-2010 trend was considerably flatter than that between 2008 and 2009 and may be attributed mainly to the application of an indexation mechanism to the manageable costs and to a lesser extent to the trend in other elements, such as depreciation and non-manageable costs (for instance, public service obligations). The provisional tariffs

6 Energy mediation service, rue Royale 47, 1000 Brussels; Tel.: 02/211.10.60; Fax: 02/211.10.69; E-mail [email protected]; website http://www.mediateurenergie.be/. 7 See 2009 Annual Report, p. 48.

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applied by DSOs (Infrax West, Inter-Energa, Iveg and ALG) were not made to change since the provisional tariffs for 2009-2012 are identical to the tariffs in force for the 2008 operating year. Trend in all-in natural gas price As was the case for electricity, which rose sharply in 2008 and fell again in 2009, the price of natural gas increased again in 2010, without reaching the level seen in 2008 however. In 2009-2010, natural gas prices did not follow the trend in oil prices.

2.4.2.Investments in the transmission system Electricity In 2010, Elia System Operator (hereinafter referred to as Elia) and RTE, the operator of the French transmission system, set up a second 225 kV three-phase circuit on an existing electricity line stretching 15 kilometres between Moulaine in France and Aubange in Belgium. A new type of electrical conductor has been used on the new three-phase circuit and on the existing circuit alike, making it possible to increase the capacity of the circuits by over 20%. According to Elia, thanks to this investment the exchange capacity between France and Belgium can be increased by around 10 to 15%. In addition, as part of the increase in the capacity of the transmission system between the coastal region and the interior of the country, a new 150 kV cable has been installed between the Blauwe Toren and Bruges sub-stations.

Natural gas In terms of capacity allocation, in 2009, Fluxys launched a subscription period procedure in consultation with and under the supervision of the CREG so as to provide a solution to the problem of capacity congestion encountered at certain entry points on the transmission system. This procedure was included in the indicative transmission programme which constitutes a catalogue of the services offered by the TSO. The subscription period procedure was amended as part of the 2010-2011 indicative transmission programme on the basis of feedback further to the 2009-2010 subscription period8. The feedback from the subscription period was used for the launch of the consultation process on the basic principles of an optimised transmission model, amongst other things. On 23 November 2010, Fluxys submitted a new proposed indicative transmission programme for the 2011-2012 period in which the subscription period procedure has been abolished further to the assertion by Fluxys that no congestion was expected on the transmission system during this period. The proposal was approved by the Management Board on 8 December 20109.

2.5. Security of supply 2.5.1. Powers of the CREG in terms of security of supply

Natural gas Electricity The investment programme of the TSO covers both the forward-looking reinforcements of the gird aimed at supplying the Belgian natural gas market and the investments to provide additional capacity for transmission from border to border on the basis of long-term reservations. In 2010, Fluxys, the TSO, allocated an investment budget of some € 400 million to reinforce the grid.

2.4.3. Capacity allocation Electricity The overall volume of commercial capacity available at the borders during the course of 2010 did not undergo any significant changes compared with 2009, despite the increase in unidentified flows due to the huge injection of wind energy in northern Germany thanks to the use of phase-shifting transformers, amongst other things.

The CREG continues to play a significant role in terms of security of supply. However, the CREG is not the only party to be involved in this issue, given the Belgian institutional context on the one hand and the distribution of powers of authority between the regulator and the energy administration on the other hand. While the regions have powers to settle “the regional aspects of energy”, the federal authority remains qualified to address “matters whose technical and economic indivisibility requires uniform implementation at national level” in the listed cases, i.e. the national plan for the equipment of the electricity sector, the nuclear fuel cycle, major storage infrastructures, the transmission and production of energy and the tariffs. In addition, the federal authority can settle everything that comes under the residual powers, which means that when a matter

8 Decisions (B)100114-CDC-938 and (B)100617-CDC-973. 9 Decision (B)101208-CDC-1029 CREG Annual report 2010

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cannot be linked to one of the powers attributed to the regions, this matter comes under the federal scope of authority. And so in principle new energy sources come under the regional scope of authority. However, the federal authority remains qualified in the North Sea and for the wind farms constructed in this zone in particular, owing to the limitation of the territorial powers of the regions to the territory of the region. The powers of the federal authority are assumed either at the level of the federal administration, which is the Directorate General for Energy, or at the level of the regulator, the CREG. The construction of new power generation units is subject to the prior granting of an individual permit issued by the Minister for Energy at the proposal of the CREG, which is in charge of the examination of applications, amongst other things. The domain concessions with a view to the construction and operation of power generation units from water, currents or wind in marine areas (wind farms) are granted by the Minister for Energy after obtaining the opinion of the CREG. As regards the outlook for long-term supplies, the CREG is being consulted in the context of the drafting of a study on the outlook for electricity supplies known as the ‘prospective study’. The CREG also has the power to advise on the draft development plan for the transmission system put forward by Elia. The CREG also has the power to approve the methodology used to assess the primary, secondary and tertiary reserve capacity, which contributes towards ensuring the security, reliability and efficiency of the grid in the control area. Similarly, it has to approve the market operating rules intended to offset 15-minute imbalances. Natural gas The CREG plays a significant role in the field of security of supply. The Act of 12 April 1965 on the transmission of gaseous and other substances by pipeline (referred to here as the Gas Act) in fact stipulates that the CREG shall be consulted when drawing up the prospective study on the security of natural gas supplies. However, the most recent achievement of the CREG in this area dates back to the publication of the (F)090713-CREG-874 study of 13 July 2009 on natural gas supply needs, security of supply and infrastructure development for the 2009-2020 time frame.

Moreover, European Regulation No 994/2010 which lays down measures aimed at guaranteeing the security of natural gas supplies came into force on 2 December 201010. This regulation lists the provisions aimed at maintaining the security of gas supplies by guaranteeing the proper and continuous operation of the internal natural gas market, by enabling the implementation of exceptional measures when the market is no longer able to provide the necessary gas supplies and by precisely defining and attributing responsibilities among natural gas companies, the member states and the European Union, both concerning preventive action and the reaction to concrete disruptions of supply. This regulation also provides for transparent mechanisms, in a spirit of solidarity, for the coordination of planning for, and response to an emergency at member state, and regional level and within the European Union. Certain provisions in this regulation shall be implemented in 2011. These include the publication of public service obligations with regard to security of supply, the appointment of the competent authority under the terms of this regulation, the definition of protected customers and the preparation of a risk analysis.

2.5.2. Development of investment Electricity n

Investments in generating units

With regard to prospective investments in onshore generating units known as at 31 December 2010, 946 MW are under construction, 3,455 MW have been authorised11 and 2,502 MW are planned12. With regard to prospective investments in offshore generating units known as at 31 December 2010, 460 MW are under construction and 1,112 MW have been authorised13. n

Investments in the electricity transmission system

The main development in the transmission system for the future is the Stevin project planned by Elia. This consists of extending the 380 kV grid between Zomergem and Zeebrugge.

10 Regulation (EU) N° 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/ EC. 11 These 3,455 MW have been authorised but construction work has not yet begun. These are projects for which a generating permit has been granted (power plants of over 25 MW). 12 For which an application for authorisation is still being processed. 13 These 1,112 MW have been authorised but construction has not yet begun. These are projects for which a domain concession (offshore wind farm) has been granted.

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This reinforcement of the grid is able to meet three needs: • transporting the energy produced by wind farms at sea to the interior of the country; • creating the conditions for a new interconnection with the Belgian grid by means of a submarine link with the United Kingdom; • improving the security of the electricity supply in West Flanders and enabling the continued economic development of the port of Zeebrugge.

n

The timing of the project depends largely on the length and progress of the various authorisation procedures needed for the construction of the project. These are scheduled to be completed by the end of 2012. In this case, the actual work could begin early in 2013 to be completed in 2014.

2.5.3. Development of supply/demand balance

Natural gas n

Expansion of storage capacity

In the context of the gradual expansion of the underground storage capacity in Loenhout, the useful storage volume increased from 650 million cubic metres of natural gas in 2009 to 675 million cubic metres in 2010. n

pen Season relating to the transmission capacity to the O Grand Duchy of Luxembourg

In the second quarter of 2009, Fluxys launched an Open Season for the capacity between Belgium and the Grand Duchy of Luxembourg. In this context, the capacities reserved as of 2015 are in line with expectations and will give rise to limited investments.

Electricity Belgium’s position on the international market depends heavily on circumstances, and in particular on the economic situation. The sharp fall in Belgian electricity demand in 2009 compared to 2008 and the increase in installed capacity created margins in the generating activities that enabled the Belgian system to reposition itself on the international market. The recovery that began in 2010 caused these margins to narrow. Belgium therefore moved from being a net importer by 10,620 GWh in 2008 to being a net exporter by 1,835 GWh in 2009 and back to being a net importer by 600 GWh in 2010 (source: Synergrid, provisional data for 2010).

Reinforcement of North Limburg Natural gas

In 2010, a major extension was undertaken of the existing H-gas pipeline from the Dilsen entry point to Lommel, in a region supplied mainly by Dutch L-gas. n

rTr2/VTN2

The laying of the rTr2/VTN2 pipeline parallel to the existing bi-directional rTr1/VTN1 pipeline along a stretch covering almost 170 km between Eynatten and Opwijk was the main achievement in 2010. n

Reinforcement of north/south axis

With regard to the north/south project, the new capacity amounts to 10 billion m³ per year. The additional compression capacity needed for this north/south project is provided at Winksele and Berneau. n

pen Season relating the transmission capacity from O France to Belgium

The first non-binding phase of a market consultation process designed to gauge market interest in the transmission capacity from France to Belgium was completed in 2010. It will not be possible to begin the binding phase however until the initiator, EDF, has decided to build a new LNG tanker terminal in Dunkirk. As at 31 December 2010, after a number of postponements, a decision was still pending.

In 2010, total natural gas consumption amounted to 214.7 TWh, which represents a considerable increase (10.6%) compared with consumption in 2009 (194.2 TWh). This increase is due entirely to the strong recovery in industrial demand for natural gas (+19.7%), which has almost returned to the 2008 level of consumption, and to a considerable increase in consumption on the distribution networks (+15.5%). Overall, the individual support portfolios of the various natural gas suppliers lead to differentiated supply depending on the type of contract. The share of long-term contracts concluded directly with the natural gas producers fell from 71.3% in 2009 to 60.3% in 2010, but still constitutes the main component, with 2010 seeing a shift towards supplies on the wholesale market. The forecasts put forward by the CREG in 2009 with regard to the supply/demand balance still apply as a reference framework for investments in the transmission system and for security of supply. The growth in demand in Belgium is mainly covered – at least contractually – by the increasing imports of Russian natural gas, while the share of Norwegian natural gas contracts is stagnating and that of British natural gas continues to decline.


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The role of LNG in covering demand is more difficult to estimate as it depends on additional investments in the LNG terminals. Nevertheless, the Zeebrugge LNG terminal already plays a major role in supplying Belgium, at least in the context of additional deliveries during peak consumption periods. Although the 2009 gas crisis between Russia and Ukraine did not disrupt the natural gas market in Belgium, it is recommended that Belgian energy policy follows this issue closely and develops appropriate regulations to ensure the security of supply.

2.5.4. Diversification of sources and routes

Gravenvoeren and the new physical entry point in Zelzate). In fact, there are bi-directional connections with The Netherlands, Germany (and the United Kingdom), but not with France. Physical imports from France are not possible at the moment. To enable such physical imports, the Blaregnies/ Taisnières interconnection point will have to become a physical entry point for the Belgian market and a deodorisation unit14 will have to be built on the French side. The forecasts regarding the choice of entry points tally with the grid reinforcements planned by 2020. Even then, substantial entry capacity available in Eynatten and Zelzate should enable increased supplies via these points.

2.6. Regulation/Unbundling

Electricity In 2010, nuclear-generated electrical power accounted for 53% of the total electrical power generated in Belgium. The share of electrical power generated using natural gas as the primary fuel amounted to 30%. In terms of capacity, nuclear energy and the CCGT together with the gas turbines accounted for almost 35.7% and 27.2% respectively of the total installed capacity of the power stations connected to Elia’s grid in 2010. Natural gas LNG supplies, mainly from Qatar, via the Zeebrugge terminal accounted for 6.2% of Belgian natural gas consumption in 2010, compared with 9.0% in 2009. With a share of 46.5%, Zeebrugge has once again confirmed its position as the gateway to the Belgian market. For the L-gas market, we observed fairly significant backhaul supplies from Blaregnies (4.9% in 2010 compared with 2.6% in 2009) on transit flows initially intended for the French market. The forecasts put out by the CREG in 2009 continue to apply. Natural gas suppliers operating on the Belgian market have a differentiated supply portfolio in which the long-term contracts concluded directly with natural gas producers constitute by far the biggest element. Obtaining supplies via the wholesale market is an option chosen mainly by the new natural gas suppliers who have few, if any, direct purchase contracts in place with natural gas producers. An analysis of the supply portfolios of importers (existing or new) points to an upward trend in supplies via Germany (through Eynatten) and The Netherlands (through ‘s

2.6.1. Powers of the CREG Over 2010, the chairman, three directors and sixteen members of staff of the CREG were appointed inspectors vested with the powers of authority of officers of the judicial police15. They are charged with seeking out and establishing infractions of certain provisions of the Gas and Electricity Acts and of the relevant implementing decrees across the territory of Belgium. In addition, in a preliminary ruling (judgment No 130/2010 of 18 November 2010), the Constitutional Court stated that the lack of hierarchical control or administrative supervision over the CREG is not contrary to the Constitution in that the CREG is an administrative authority with a considerable degree of autonomy and in addition is subject to both jurisdictional and parliamentary control. The Court added that the fact that the CREG fulfils its assignments with a high level of autonomy results from the requirements of European Union law, which has become gradually more explicit in this area.

2.6.2. Role of TSOs on the markets Electricity On the electricity market, the operation of the power exchange is regulated by the Royal Decree of 20 October 2005 regarding the creation and organisation of a Belgian market for the exchange of energy blocks. Article 6 of this decree specifically outlines the behaviour and responsibilities of the market operator and the TSO if the market is coupled to similar markets. Pursuant to this article, the market operator may, in

14 In Belgium, natural gas is odorised (injection of an odorising substance to enable the detection of leaks, as natural gas is odourless) as soon as it is injected into the distribution networks. In the transmission system, natural gas is not really odorised because this creates problems for the chemicals industries that uses natural gas as a raw material. In France, however, natural gas is odorised in the transmission system. Gas taken up by the chemicals sector is, if necessary, processed by an individual deodorisation plant. 15 Royal Decree of 25 June 2010 appointing the members of the Management Board and the members of staff of the Commission for Electricity and Gas Regulation, as officers of the judicial police (Belgian Official Journalof 23 July 2010).

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this case, at the request of the TSO, implement the methods for the allocation of the available capacity to the market coupling for energy exchanges with foreign grids, provided that this is done transparently and without discrimination. In practice, Elia and Belpex use this Article 6. The Day-Ahead capacity on the interconnections with The Netherlands and France is implicitly auctioned on the Belpex Day-Ahead market. For annual and monthly capacities, the capacity on the interconnections concerned is auctioned explicitly.

transposition of which was 3 March 2011. Other amendments to the Act were put forward at the same time so as to improve the functioning and follow-up of the market, resolve certain legislative difficulties and inconsistencies and establish a logical structure for the Acts in question. An initial study on the Act of 29 April 1999 relating to the organisation of the electricity market (hereafter: the Electricity Act) was published in April 201016, followed by a second version on 5 November 201017. On the same date, a study on the Gas Act18 was also presented.

Natural gas On the natural gas market, the operation of the hub and the exchange is organised by Huberator and APX, which are not regulated. The TSO, which is regulated, does not have a specific role to play on these markets. It is a member of the markets, in the same way as other parties, to obtain natural gas supplies in line with its own needs.

2.6.3. D evelopment of unbundling of TSOs The electricity TSO On 31 March 2010, the Elia Board of Directors approved the agreement concluded between Elia, Publi-T and Electrabel/ GDF/SUEZ on the terms and procedures for the withdrawal of Electrabel from the capital of Elia. Under the terms of this agreement, Electrabel is selling 12.5% of the capital of Elia to Publi-T, bringing Publi-T’s stake in the capital of Elia to 45.37%. The natural gas TSO Further to an Act of 10 September 2009, in March 2010 GDF SUEZ and Publigaz concluded an agreement on the transfer of the entire stake of Electrabel in Fluxys (38.5%) to Publigaz. The transaction was effected on 5 May 2010. Further to this transaction, Publigaz’s stake in Fluxys has increased to 89.97%, while the GDF SUEZ group has withdrawn entirely from the capital of Fluxys.

2.7. Transposition of the third legislative package Over the course of 2010, the CREG carried out a number of studies with a view to adapting the Gas and Electricity Acts to the new European rules of the third energy package promulgated in July 2009, the final deadline for the

The amendments proposed are in line with the objectives of the third energy package, and specifically relate to: • increasing the independence and powers of the energy regulators; • separating production and supply activities on the one hand and grid activities on the other (unbundling); • improving market transparency with a view to promoting equality of access to information, price transparency and consumer confidence in the market and avoiding market manipulation; • strengthening consumers’ rights; • ensuring cooperation between European energy regulators through the newly created Agency; • promoting cooperation between the TSOs.

2.8. General conclusions regarding the legal framework At a time when the procedure begun by the European Commission with regard to Belgium’s infringements of the second package is taking its course (see paragraph 3.1.1.C below), the deadline for the transposition of the third European energy package is fast approaching. This will require numerous significant modifications to the Belgian legal framework, including to the Gas and Electricity Acts. The modifications to be brought will enable the CREG to carry out its general monitoring assignment in full. Examples of the biggest modifications to be brought include the determination by the CREG of the conditions for the connection and access to the grids and the rules on capacity allocation and congestion management, the certification of TSOs, the problems inherent to closed distribution networks, tariffs, grid development plans and the powers of the CREG as a regulator.

16 Study (F)100416-CDC-962. 17 Study (F)101105-CDC-986. 18 Study (F)101105-CDC-984.


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3. Regulation and operation of the electricity market


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3.1. Regulation 3.1.1. M anagement and allocation of interconnection capacities and congestion mechanisms

in November 2009 the latter asked the TSOs to submit a proposal based on an implicit (transmission capacity and energy) and continuous allocation mechanism. The system operators responded in February 2010 with an information study. An adapted version of this study was produced in June 2010 in response to specific requests from the regulators.

A. Regional and bilateral developments The growing importance of the regional integration of energy markets was pointed out in the third European legislative package which stresses that the regional level is an essential first step towards a single European energy market. The CREG is closely following the development of this issue in the context of the electricity regional initiatives (ERI). In 2010, the work on integrating the markets of the Central West Europe region (hereinafter CWE, which includes Belgium) carried out under the leadership of the CREG related mainly to daily market coupling, setting up a regional mechanism for Intraday exchanges, the auctioning rules for cross-border transmission capacity and calculating interconnection capacities. Generally speaking, substantial delays have built up with regard to these priority activities compared with the initial schedule. One key objective is the creation of a flow-based D-1 market coupling. To this end, the TSOs and regulators of the CWE region have held a series of meetings to prepare for the launch of CWE coupling, initially scheduled for May 2010. The main aim of these meetings was to reach a better understanding of the capacity calculation mechanism, the congestion management methods and the methods used to allocate the available daily capacity to the Access Responsible Party, as well as establishing a common position on these matters and discussing the regulatory process. Further to coordination with the volume coupling between Germany and the Scandinavian countries and implementation problems in the final phase of the market coupling process, the CWE market coupling was finally launched on 9 November 2010. This coupling means that the Belgian daily market is now coupled, on the basis of implicit auctions, with France, Germany, Luxembourg and The Netherlands. At the same time it also involves the coupling of the CWE region with the Scandinavian countries through Interim Tight Volume Coupling (ITVC). At the moment, the CWE coupling is based on the Available Transmission Capacity (ACT) and not on energy flows.

These developments in the CWE region gave rise to coordination between the energy regulators, the TSOs and the electricity exchanges. The CREG took a number of decisions in this context relating to the long-term, daily and Intraday markets. On 7 October 2010, the Management Board approved the proposal put forward by Elia relating to the harmonised auctioning rules for the CWE region, with the exception of Article 4.01 (b) (i), the application of which was authorised nonetheless so as to avoid compromising the implementation of the improvements contained in the modified auctioning rules19. Thanks to the harmonised auctioning rules, identical rules apply throughout the CWE region for the allocation of interconnection capacity, whichever the required interconnection for the capacity. Moreover, market players wishing to acquire annual and monthly interconnection capacity in the CWE region can now contact a common auctioning body, the CASC CWE. Furthermore, the launch on 9 November 2010 of daily market coupling based on prices has also given rise to a number of CREG decisions. In February 2010, the Management Board issued an opinion on the application for approval of the modifications proposed by Belpex concerning the market rules of the Belpex market20. These modifications were introduced so as to enable the implementation of market coupling of the Belgian, Dutch and French hubs (Belpex, APX and EPEX Spot) to the German hub (EPEX Spot). Further to this opinion, the Minister for Energy authorised the proposed modifications21. The methodology used to calculate interconnection capacity is based on existing methodologies to determine interconnection capacity. It is supplemented by coordinated monitoring of grid security by the TSOs of the CWE region, which may result in a coordinated reduction in capacity. On 26 October 2010, the Management Board issued its decision on the methodologies used to calculate daily capacities22.

The regulators of the CWE region also intend to set up a regional Intraday mechanism. On the basis of consultation with the market players in 2009 organised by the regulators,

19 Decision (B)101007-CDC-993. 20 Opinion (A)100211-CDC-946. 21 Ministerial Decree of 19 February 2010 approving modifications to the regulations on the energy blocks exchange market (Belgian Official Journalof 4 March 2010). 22 Decision (B)101026-CDC-997.

16



In October 2010, the Management Board also took a decision on the proposal put forward by Elia on the congestion management methodologies and the methodologies used to allocate the available daily capacity on the Belgium/ France and Belgium/Netherlands interconnections23. It refused to approve the methodologiess proposed as they failed to comply with Article 3.5 of the “Guidelines on the management and allocation of available interconnection transfer capacity of interconnections between national systems” annexed to Regulation (EC) 1228/2003 which aims to achieve flow-based coupling. The Management Board did however authorise the implementation of the proposed coupling in the interests of the Belgian electricity market. Finally, as regards the Intraday coupling mechanisms, the CREG and the Dutch regulator NMa followed the development of a temporary bilateral Intraday mechanism between Belgium and The Netherlands. This mechanism will be based on the Elbas system which is already in place in the Scandinavian countries. This will be a continuous and implicit system. To prepare for the adaptation of the market rules to the specific features of this new Intraday market, the Management Board issued an opinion in September 2010 on the modifications to the market rules24 proposed by Belpex. Further to this opinion, the Minister for Energy authorised the proposed modifications25.

the Belgian grid. For more details on this subject, see paragraph 5.1 of this report. Thanks to the Intraday mechanism for interconnection capacity introduced in May 2007 for the southern border, 469 GWh were imported from France and 392 GWh were exported to France in 2010. Thanks to the Intraday mechanism for interconnection capacity introduced in May 2009 for the northern border, 78 GWh were imported from The Netherlands and 100 GWh were exported to The Netherlands in 2010. Intraday connections were used slightly less than 65% of the time in 2010, compared with 58% in 2009. Figure 1 below shows the evolution of the import and export capacity made available on the market on a Day-Ahead basis (monthly average), as well as the related total net usage. This figure shows that no extreme developments occurred in 2010 in terms of the use (nomination) of interconnection capacity: the monthly maximum average use was always below 1,000 MW except in December (with average imports of 1,250 MW). This result contrasts with the results obtained for 2008, marked by high imports during the period from February to May, and for 2009, marked by high exports during the period from July to September. Furthermore it appears that the seasonal reduction in import capacity did not get underway until May 2010, whereas in 2009 this occurred as early as March.

Moreover, in mid-2010 the TSOs of the CWE region, together with the British and Scandinavian TSOs, launched a new North-West Europe (NWE) Intraday initiative. A clear development plan will be prepared in 2011 to achieve implicit coupling on the Intraday markets in the CWE region, the Scandinavian countries and the United Kingdom. The regulators in these countries are involved in these discussions.

B. Market results on interconnections Having exported net electrical power on an annual basis in 2009 for the first time since the liberalisation of the market, Belgium again imported electricity on an annual basis in 2010, albeit only on a very small scale. Net physical imports amounted to around 0.55 TWh in 2010, whereas net exports amounted to 1.8 TWh in 2009. Gross physical imports in 2010 amounted to around 12.4 TWh, compared with 9.5 TWh in 2009, and gross physical exports were around 11.8 TWh, compared with 11.3 TWh in 2009. A substantial proportion of the physical energy flows comes from cross-border transiting of electricity passing through

23 Decision (B)101028-CDC-998. 24 Opinion (A)100930-CDC-990. 25 Ministerial Decree of 26 October 2010 approving modifications to the regulations on the energy blocks exchange market (Belgian Official Journalof 4 November 2010).


17


Figure 1: Availability and use of interconnection capacity from 2007 to 2010 MW 4.000 3.000 2.000 1.000 0 -1.000 -2.000 -3.000 -4.000 -5.000

Average export capacity

Average import capacity

2010/11

2010/09

2010/07

2010/05

2010/03

2010/01

2009/11

2009/09

2009/07

2009/05

2009/03

2009/01

2008/11

2008/09

2008/07

2008/05

2008/03

2008/01

2007/11

2007/09

2007/07

2007/05

2007/03

2007/01

-6.000

Average nomination Source : CREG

The table below shows that average export and import capacity rose slightly in 2010 compared with previous years. As regards import capacity, this increased in 2010 compared with the previous years. The average nomination (use) was positive in both years (indicating commercial exports), compared with negative nominations in 2007-2008 (indicating commercial imports). In 2010, the Belgian control area was a net exporter of energy. Table 1: Average import/export capacity and average nomination per year (MW)

Year

Average export capacity

Average import capacity

Average nomination

2007

2,317

-3,908

-709

2008

2,242

-3,882

-1,196

2009

2,460

-3,877

319

2010

2,558

-4,023

17

Average

2,394

-3,923

-393 Source: Elia data, CREG calculations

The following table shows the trend in annual revenues from (import and export) capacity acquired by market players in the context of explicit auctions, valid for the following year or the following month. This table shows that in comparison with the past, the market players were able to obtain annual and monthly capacity for a lesser amount in 2010 (€ 33.6 million).

18


So they anticipated the smaller price deviations in 2010 compared with previous years, indicating better convergence of the markets in Belgium, The Netherland and France. Table 2: Annual revenues from capacities offered for auction (in millions of euros)

M€

Annual auctions

Monthly auctions

Total

2007

38.9

16.0

54.9

2008

27.1

11.6

38.7

2009

30.9

12.3

43.2

2010

25.5

8.1

33.6 Source: Elia data, CREG calculations

When market players buy capacity, they estimate in advance what they believe will be the price differences between the Day-Ahead exchanges of the three countries (Belgium, The Netherlands and France). These differences, which are expressed on the short-term Belpex DAM market, indicate that the interconnection capacity between two given markets is saturated. In principle, the resulting congestion rent is allocated to the TSOs. However, if a market player buys interconnection capacity at the explicit auction (annual and/ or monthly capacity) and fails to use it, this capacity is allocated to the implicit market coupling on the short-term exchanges. The initial owner who has not used this capacity subsequently receives the congestion rent if there is a price difference in the direction of his capacity.


The trend in congestion rents, per type of player, over the 2007 to 2010 time period, as shown in the table below, reveals that in 2010 market players (‘resale’ in the table below) received over half of the total congestion rents, i.e. a share approximately equal to that of previous years. In 2010, the total congestion rent also proved to be € 4 million lower than that of 2009, and as much as €10 million lower than that of 2007 and € 11 million lower than that of 2008, reflecting better convergence among exchange prices. However, it should be noted that 2009 and to a lesser extent 2010 were crisis years in economic terms, which could explain some of the price convergence. Table 3: Congestion rents on coupled electricity exchanges per type of player (in millions of euros)

M€

TSOs

Resale

Total

2007

23.7

19.5

43.2

2008

21.1

23.1

44.2

2009

16.6

20.7

37.3

2010

16.2

17.1

33.3

In practical terms, the main violations of the legislation noted by the Commission were as follows: the first violation concerned a lack of information from the electricity TSO, which hampers effective access to the energy suppliers’ network. Secondly, the Commission considered the grid capacity allocation systems to be inadequate, preventing the best possible use of the electricity transmission systems. Finally, the Commission criticised the lack of cross-border coordination and cooperation between electricity TSOs and national authorities in the CWE region. The Commission believes that this coordination and cooperation are necessary to allocate crossborder interconnection capacities more efficiently so as to optimise the use of the electricity grid. In August 2010 the Management Board sent the Minister for Energy its report on the objections put forward by the European Commission as set out in its reasoned opinion of 24 June 201026.

3.1.2. Regulation of transmission and distribution A. Transmission and distribution tariffs

Source: Elia data, CREG calculations

n The

As regards the calculation of commercial interconnection capacities, a substantial proportion of the physical capacities is set aside as a security margin for loop flows through Belgium, given their volume and unpredictability. Finally, it should also be pointed out that as it has done every year since 2008, in February 2010 the Management Board conducted a study into Belpex, the Belgian shortterm market for electricity and the use of capacity on the interconnections with France and The Netherlands for 2009 (see also paragraph 3.2.2.). C. Infringement proceedings against Belgium In June 2010, the European Commission sent Belgium, along with twenty other European member states, requests to implement and apply “in full various aspects of EU legislation intended to create a single gas and electricity market”. As regards the electricity market, the infringements for Belgium, proceedings for which had been opened in June 2009, relate to the failure to comply with the legal obligation resulting from Regulation (EC) 1228/2003 on conditions for access to the network for cross-border exchanges in electricity (which came into force on 1 July 2004), as well as the annexe (amended by a decision of 9 November 2006 which came into force on 29 November 2006).

transmission system (Elia)

a) Methodology used to calculate the tariffs The methodology used to calculate the multi-annual transmission tariffs of electricity (four-year regulatory period) introduced by the Royal Decree on tariffs of 8 June 200727 has remained unchanged since 1 January 2008. The system established by this Royal Decree is a normative secured revenue system in that it guarantees the TSO, during a regulatory period of four years, sufficient total revenue to undertake its duties as defined by law and provide a fair margin to remunerate the capital invested in the grid. The revenue of each year in the regulatory period is divided into manageable costs, that is costs over which the system operator exercises direct control, and non-manageable costs, which are listed in the Royal Decree of 8 June 2007. The total revenue is generated by the implementation of a number of rules on the development of tariffs applied to the revenue for the first year used as a benchmark to deduce the revenue for the second, third and fourth year. Dividing the total revenue for the four years by the total volumes to be transmitted gives constant unit tariffs valid for the entire regulatory period, except for exceptional circumstances or changes to the services provided.

26 Study (F)100824-CDC-985. 27Royal Decree of 8 June 2007 on the rules on determining and monitoring the total revenue and fair profit margin, the general tariffs structure, the balance between costs and receipts and the basic principles and procedures with regard to proposing and approving tariffs, reporting and cost control by the national electricity transmission system operator.


19


The most striking difference of this methodology compared with the previous methodology based on a cost-plus regulation is the incentive for the TSO to stimulate its profitability by means of the balance of manageable costs: every year, the difference between the real manageable costs and the budgeted manageable costs is in fact granted to the operator. However, the cost reduction stored up by the system operator must ultimately (in the next regulatory period) also give rise to tariff reductions for the benefit of grid users. This incentive regulation system is also applied in other countries.

determine the fair profit margin provided that a TSO does not demonstrate that another approach is more suitable. b) Tariff trends The historic trend followed by transmission tariffs over time since the start of regulation exercised by the CREG is illustrated below. As the tariffs for use of the transmission system and for ancillary services are multi-annual tariffs that have been approved for the entire 2008-2011 regulatory period. They remain unchanged in 2010 compared with 2009 and 2008.

The current tariffs system is also typified by: • the implementation of a development rule applicable to the manageable costs based on an indexation mechanism that includes both an ex-ante and an ex-post calculation; • the taking into account of an incentive to increase investments. In fact, since 1 January 2008, when tangible fixed assets were decommissioned, the portion of the capital gain relating to the assets concerned coming from the initial regulated assets can be imputed to the total revenue to be covered by the tariffs, provided that the amounts corresponding to this capital gain are booked as an investment reserve and consequently remain within the company and can be used as a source of self-financing; • the taking into account of congestion revenues for the benefit of tariffs; • the application of the CAPM (capital asset pricing model), recommended by the Management Board to

c) 2009 balances The Management Board also expressed an opinion on the tariff balances relating to the 2009 operating year reported by Elia28. On the basis of the results of its monitoring programme relating to the 2009 Annual Report, the Management Board decided: (i) not to approve the 2009 balances reported by Elia, rejecting certain elements of the total revenue of Elia (in particular the grossing up of the 2009 balance on the manageable costs) as well as the expenditure linked to the Black Start service provided by the Drogenbos power plant;

Table 4: Trend in the cost price for the transmission of electricity depending on the voltage, excluding surcharges and VAT Offtake in the grids 380/220/150kV

Offtake in transformation to 70/36/30 kV

Offtake in the grids 70/36/30 kV

Offtake for transformation to average voltage

7,000

6,500

6,000

5,500

Utilisation period (h/year) Cost in €/MWh

% compared with the previous period

Cost in €/MWh


Cost in €/MWh


Cost in €/MWh


2002 January-September (1)

6.4014

2002 October-December and 2003 January-March

5.1503

-19.54%

6.7534

-25.65%

9.2888

-28.60%

11.532

-26,91%

2003 April-December

4.8239

-6.34%

6.3065

-6.62%

8.6259

-7.14%

10.9897

-4,70%

2004

4.4098

-8.58%

5.8862

-6.66%

8.2113

-4.81%

10.0685

-8,38%

2005

3.8417

-12.88%

5.1782

-12.03%

7.4714

-9.01%

8.7815

-12,78%

2006

3.4357

-10.57%

4.5834

-11.49%

7.0442

-5.72%

8.2754

-5,76%

2007

3.0232

-12.01%

4.1466

-9.53%

6.1883

-12.15%

7.3562

-11,11%

0verall fall 2007 compared with period (1)

9,0838

-52.77%

13.0100

-54.35%

15.7773

-52.43%

-53,37%

Start of multi-annual tariff 2008-2011 regulatory period 2008

3.5002

15.78%

4.9766

20.02%

7.7060

24.52%

9.1063

23,79%

2009

3.5002

0.00%

4.9766

0.00%

7.7060

0.00%

9.1063

0,00%

2010

3.5002

0.00%

4.9766

0.00%

7.7060

0.00%

9.1063

0,00%

0verall fall 2010 compared with period (1)

-45.32%

-45.22%

-40.77%

-42,28% Source : CREG

20

28 Decisions (B)100512-CDC-658E/15 and (B)100625-CDC-658E/16. CREG Annual report 2010


(ii) to set the 2009 balance on the non-manageable costs at the sum of € 7,921,062.24, which constitutes a regulatory claim in favour of Elia; (iii) to set the 2009 balance on sales volumes at the sum of € 14,789,000, which also constitutes a regulatory claim in favour of Elia. d) Jurisprudence In July 2010 Elia lodged an appeal with the Brussels Court of Appeal for the annulment of the aforementioned decision by the Management Board on 25 June 2010. The appeal ruling is expected in the first half of 2011 and should be taken into consideration in the opinion on the allocation of accumulated balances from the past four operating years which the Management Board will pass on to the Minister for Energy during the course of spring 2011. e) Study on the comparison between the prices paid by Elia for the purchase of energy to offset active losses on its regional grids and the energy prices paid by major industrial customers in 2009 In this study conducted in December 201029, the Management Board noted that for one of the thirteen batches of energy purchased by Elia, the purchase price was unreasonably high. The Board is considering following up this finding in the context of its decision on the operating balances for 2010. n

The distribution networks

a) Methodology used to calculate the tariffs As with the transmission activity, a new tariffs regulation methodology for distribution based on a guaranteed revenue for the DSO and supplemented by incentives aimed at promoting cost control came into force on 1 January 2009. This new system guarantees the DSO, for a regulatory period of four years, adequate total revenue to carry out its legal duties and receive a fair profit margin to remunerate the capital invested in the network. The previous methodology, which was applied until 1 January 2009, adopted the cost-plus method, whereby the costs incurred by the DSOs, monitoring by the CREG, were increased by a profit margin offering a fair remuneration for the capital invested in the distribution network. These tariffs were approved by the CREG for a period of one year or, if necessary, were imposed per quarter.

Three methodologies underlying the calculation of the tariffs are now possible during the aforementioned four-year regulatory period: • approval of the tariffs for the entire regulatory period if the tariffs proposal accompanied by the network operator’s budget has been approved before the start of the regulatory period; • approval of the tariffs for the remainder of the regulatory period if the aforementioned tariffs proposal has been approved during this period; • the imposition of tariffs in all other cases. On 30 September 2008, all the DSOs bar one submitted a tariffs proposal accompanied by a budget for the 20092012 regulatory period within the legal deadline. As none of the proposals submitted met the information requirements stipulated by the Royal Decree of 2 September 200830, the Management Board decided to reject these proposals and impose provisional tariffs. The provisional tariffs imposed are based on the latest elements of the corresponding approved total revenue, that is the tariffs for the 2008 operating year. These provisional tariffs remain in force for the entire duration of the regulatory period or until all the arguments open to the DSO or the CREG have been exhausted or until an agreement has been reached between on the points of contention between the CREG and the DSO. Over the course of 2009, most of the DSOs submitted new tariffs proposals for the 2009-2012 regulatory period on the basis of the new reporting model. The mixed DSOs (in which both the public sector and the private sector have capital holdings) whose operation was entrusted to the companies Eandis (Flanders) and Ores (Wallonia) obtained approved tariffs for the 2009-2012 regulatory period as of 1 July and 1 October 2009 respectively. The mixed DSO for Brussels, Sibelga, and two «pure» Walloon DSOs, AIEG and AIESH (whose capital is held only by public sector authorities) also obtained approved tariffs as of 1 October 2009. At the end of 2010, the CREG concluded an agreement with four pure DSOs whose operation has been entrusted to the company Infrax (Infrax West, Iveg, Inter-Energa and PBE) on pending points of contention so that their respective tariffs have been approved as of 1 January 2011. When assessing the tariffs proposals and the annual report of the DSOs, the Management Board checked the separation between the network activities on the one hand and any other activities undertaken by the network operator on the other. It also checked the separation between regulated and non-regulated network activities. In this context, the Management Board issued a number of guidelines31

29 Study (F)101208-CDC-991 30 Royal Decree of 2 September 2008 on the rules on determining and monitoring the total revenue and fair profit margin, the general tariffs structure, the balance between costs and receipts and the basic principles and procedures with regard to proposing and approving tariffs, reporting and cost control by the national electricity transmission system operator. 31 Guidelines (R)100715-CDC-979.


21


defining a general framework for the assessment and treatment of regulated and non-regulated network activities. The Management Board already pointed out on a number of occasions in previous reports that the new regulatory framework allows it few powers to assess the reasonable and real nature of the costs as presented by the DSOs. The Management Board is therefore of the opinion that the legislation on the distribution tariffs needs to be reviewed in accordance with the new European directive (Directive 2009/72/EC). The transposition of this directive will make it possible to correct the legislation applicable to tariffs and provide the regulator with the powers needed to guarantee correct distribution tariffs32.

b) Tariffs trends Table 5 provides an overview of tariff trends between 2008 and 2010. There are no changes for the DSOs upon whom provisional tariffs have been imposed for the 2009-2012 period given that these are an extension of the tariffs applicable for the 2008 operating year. The 2009-2010 trend was considerably flatter than that between 2008 and 2009 and may be attributed mainly to the application of an indexation mechanism to the manageable costs and to a lesser extent to the trend in other elements, such as depreciation and non-manageable costs (public service obligations, for instance). In 2010, imposed tariffs were billed for two Walloon DSOs (Tecto and Wavre) and for the «pure» Flemish sector (Infrax West, Inter-Energa, Iveg and PBE). These are based on the most recent corresponding total revenue elements approved, i.e. the tariffs for the 2008 operating year. These provisional tariffs remain in force for the entire duration of the regulatory period or until all arguments open to the DSO or the CREG have been exhausted or until an agreement has been reached between on the points of contention between the CREG and the DSO. During the last quarter of 2010, the «pure» Flemish sector submitted new tariffs proposals for the 2009-2012 regulatory period. As these new tariffs proposals include all the information and justifications required by the Royal Decree of 2 September 2008, the Management Board approved the tariffs for 2011 and 2012. Significant differences in tariffs are seen to exist between the various DSOs. These may be explained on the one hand by topographical and technical factors specific to the areas supplied and on the other hand by the scope of the public service obligations and whether or not the fee for occupation of the public domain is taken into account in the tariffs. Other factors, such as the transfer of balances from the previous years (bonus/malus) also contribute towards these differences in tariffs. Figures 2, 3 and 4 give the average composition of the distribution network cost in Flanders, Wallonia and Brussels.

32 Study (F)101105-CDC-986.

22



Table 5: Tariffs for the use of the distribution network in 2008, 2009 and 2010 (in €/kWh), excluding VAT Tariffs: Approved: A Extended 2008: E

€/kWh GRD

Household low voltage 3,500 kWh/year

Industrial average voltage 30,000 kWh/year

2008

2009

2010

Δ 2010/2009

0.0449

2008

2009

2010

0.0376

Δ 2010/2009

Industrial average voltage 1,250,000 kWh/year 2008

2009

2010

Δ 2010/2009

0.0142

AGEM

E

0.0449

0.0449

0.00%

0.0376

0.0376

0.00%

0.0142

0.0142

0.00%

AIEG

A

0.0360 0.0437 (3) 0.0452

3.26%

0.0458 0.0601 (3) 0.0678

12.69%

0.0154 0.0271 (3) 0.0279

3.14%

AIESH

A

0.0574 0.0681 (3) 0.0694

1.91%

DNB BA

E

pas applicable (1)

0.0601 0.0601 (3) 0.0616

2.52%

0.0237 0.0239 (3) 0.0245

2.57%

0.0809

0.0809

0.0809

0.00%

0.0300

0.0300

0.0300

0.00%

0.0650

0.0160

EV/GHA

E

0.0881

0.0881

0.00%

0.0650

0.0650

0.00%

0.0160

0.0160

0.00%

GASELWEST

A

0.0558 0.0641 (2) 0.0653

1.98%

0.0462 0.0446 (2) 0.0461

3.24%

0.0158 0.0157 (2)

0.0161

3.07%

GASELWEST WA

A

0.0506 0.0638 (2) 0.0602

-5.53%

0.0462 0.0446 (2) 0.0461

3.24%

0.0158 0.0157 (2)

0.0161

3.07%

IDEG

A

0.0576 0.0630 (3) 0.0632

0.22%

0.0441 0.0418 (3) 0.0421

0.81%

0.0164 0.0156 (3)

0.0156

0.13%

IEH

A

0.0481 0.0567 (3) 0.0567

-0.04%

0.0440 0.0468 (3) 0.0489

4.51%

0.0162 0.0171 (3)

0.0188

9.67%

IMEA

A

0.0461 0.0468 (2) 0.0477

1.87%

0.0419 0.0408 (2) 0.0417

2.15%

0.0148 0.0148 (2)

0.0150

1.43%

IMEWO

A

0.0881

0.0460 0.0524 (2) 0.0533

1.74%

0.0392 0.0381 (2) 0.0389

2.04%

0.0140 0.0140 (2)

0.0143

1.88%

0.0607

0.0607

0.00%

0.0320

0.0320

0.00%

0.0116

0.0116

0.00%

A

0.0697 0.0775 (3) 0.0771

-0.44%

0.0531 0.0536 (3) 0.0549

2.43%

0.0192 0.0197 (3) 0.0200

1.53%

INTERGEM

A

0.0470 0.0533 (2) 0.0544

2.04%

0.0382 0.0405 (2) 0.0418

3.11%

0.0135 0.0142 (2)

0.0146

2.61%

INTERLUX

A

0.0676 0.0736 (3) 0.0746

1.39%

0.0486 0.0466 (3) 0.0496

6.41%

0.0176 0.0166 (3)

0.0175

5.24%

INTERMOSANE A

0.0602 0.0693 (3) 0.0694

0.24%

0.0537 0.0550 (3) 0.0554

0.71%

0.0202 0.0209 (3) 0.0209

-0.14%

INTERMOSANE VL A

0.0602 0.0788 (3) 0.0789

0.09%

0.0537 0.0550 (3) 0.0554

0.71%

0.0202 0.0209 (3) 0.0209

-0.14%

0.0541

INTER-ENERGA E

0.0607

INTEREST

0.0320

0.0116

IVEG

E

0.0541

0.0541

0.00%

0.0420

0.0420

0.00%

0.0151

0.0151

0.00%

IVEKA

A

0.0427 0.0482 (2) 0.0490

1.59%

0.0373 0.0392 (2) 0.0400

2.07%

0.0126 0.0137 (2)

0.0140

1.91%

IVERLEK

A

0.0496 0.0543 (2) 0.0552

1.62%

0.0386 0.0397 (2) 0.0406

2.15%

0.0137 0.0143 (2)

0.0145

1.52%

PBE

E

0.0592

0.0592

0.0592

0.00%

0.0347

0.0347

0.0347

0.00%

0.0142

0.0142

0.0142

0.00%

PBE W

E

0.0500

0.0500

0.0500

0.00%

0.0333

0.0333

0.0333

0.00%

0.0133

0.0133

0.0133

0.00%

SEDILEC

A

0.0505 0.0555 (3) 0.0554

-0.24%

0.0399 0.0415 (3) 0.0423

1.83%

0.0147 0.0150 (3)

0.0152

1.13%

SIBELGA

A

0.0452 0.0505 (3) 0.0556

10.18%

0.0588 0.0483 (3) 0.0531

9.95%

0.0175 0.0147 (3)

0.0158

7.50%

SIBELGAS NOORD

A

0.0478 0.0523 (2) 0.0529

1.13%

0.0348 0.0462 (2) 0.0482

4.38%

0.0124 0.0165 (2)

0.0172

3.94%

SIMOGEL

A

0.0415

0.0471

0.56%

0.0427

0.0447

0.31%

0.0143

0.0150

0.0150

-0.09%

TECTEO

E

0.0451

0.0451

0.0581 (4) 28.65%

0.0531

0.0531 0.0647(4)

21.73%

0.0189

0.0189

0.0234 (4)

23.62%

WAVRE

E

0.0371

0.0371

0.0371

0.00%

0.0463

0.0463

0.0463

0.00%

0.0184

0.0184

0.0184

0.00%

WVEM

E

0.0628

0.0628

0.0628

0.00%

0.0436

0.0436

0.0436

0.00%

0.0160

0.0160

0.0160

0.00%

0.0528

0.0578

0.0588

1.87%

0.0460

0.0467

0.0483

3.00%

0.0163

0.0169

0.0175

2.54%

Average

0.0473

0.0420

0.0448

0.0151

(1) DNB BA does not serve any household customers (2) Applicable as of 1 July 2009 (before this date the 2008 tariffs applied) (3) Applicable as of 1 October 2009 (before this date the 2008 tariffs applied) (4) Applicable as of 3 May 2010 at the earliest

Figure 2: Average composition of distribution

Source : CREG

Figure 3: Average composition of distribution cost

cost in Flanders in 2010 6.59%

in Wallonia in 2010

2.24% 1.33%

3.33% 1.21%

Subscribed and additional capacity

8.66%

Subscribed and additional capacity

12.61%

System management

2.76%

Measuring and metering activity

5.62%

Ancillary services

Public service obligations Surcharges

System management Measuring and metering activity 6.96%

Public service obligations Ancillary services Surcharges

5.81%

Meter hire

Meter hire 6.14%

72.79%

Source: CREG

63.95%

Source: CREG


23


Figure 4: Average composition of distribution cost in Brussels in 2010 9.81% Subscribed and additional capacity

7.57%

System management Measuring and metering activity Public service obligations Ancillary services

18.35%

Surcharges

55.86% 4.20% 4.21%

Source: CREG

c) 2009 balances In 2010, the Management Board processed the balances of the DSOs relating to the 2009 operating year. For most of them, a bonus was recorded on manageable costs and a malus on non-manageable costs. The balance of manageable costs is included in the income statement of the DSO while the Minister for Energy decides on the allocation of the accumulated balances of non-manageable costs relating to the operating years 2008 to 2011 inclusive. When processing the 2009 balances, particular attention was paid to elements decommissioned by the DSOs and the Management Board used a monitoring programme to check whether the methodology proposed was observed and whether the elements reported as having been decommissioned were actually decommissioned both in the field and in administrative and accounting terms. d) Jurisprudence In 2010, the Court of Appeal in Brussels held a number of rulings further to the regulatory vacuum found with regard to its jurisprudence, under which the Royal Decrees of 2 September 2008 had been declared unlawful. In response thereto, the legislator had ratified the decrees in question (see 2009 Annual Report, pp. 28 and 51) but this did not alter the fact that the decrees had been drawn up contrary to European requirements in this field (more specifically the ban on arbitrary modification of the proposal put forward by the regulator). Given this situation, the Management Board concluded in a number of decisions that the CREG did not have a valid basis to take decisions on tariffs. In a number of rulings given on 29 June 2010, the Court of Appeal in Brussels rejected this point of view with respect to the rules on establishing the value of the regulated assets. The CREG was ordered to reach a new decision, in application of the relevant provisions of the Royal Decree on tariffs.

24


These judgments were then extended in another series of rulings on tariffs decisions taken by the CREG, in which the Court had decided that the tariffs proposed by the DSOs were valid ipso jure. The Court did however decide that it was not impossible that the tariffs decisions had not been taken in accordance with the directives on certain points, but not to the extent that the Royal Decree had to be rendered unenforceable in its entirety. The Court specified that, moreover, there was no reason why the CREG should not apply some of the specific provisions concerned. In order to put an end to the constant uncertainty, Infrax and the CREG reached an agreement during the last quarter of 2010 concerning the tariffs to be applied during the last two years of the 2009-2012 regulatory period. As a result, new approved tariffs have been valid for all Infrax members since 1 January 2011. The legal proceedings with Sibelga, the Brussels DSO, have also been brought to a close and the tariffs have been approved. e) Operating companies of DSOs The various operating companies fulfil all the assignments and duties resulting from the obligations of the DSOs in accordance with their articles of association. They have the administrative bodies necessary for this purpose (Board of Directors, Audit Committee, Human Resources Committee, Corporate Governance Committee, etc.). Eandis was incorporated on 30 March 2006. Seven Flemish mixed DSOs (Gaselwest, Imea, Imewo, Intergem, Iveka, Iverlek and Sibelgas) call upon Eandis to fulfil their operating assignments in their regions. Figure 5 shows the Eandis structure in 2009 and 2010 on the basis of the shares held by each DSO in Eandis. Infrax was incorporated on 7 July 2006 by the three «pure» sleeping partners of Interelectra (now known as Inter-Energa), Iveg and Wvem (now known as Infrax West) to bring together the operating activities in their region. PBE joined Infrax in the course of 2010 and the electricity supplies of the Havenbedrijf Antwerpen joined Iveg at the end of 2010. Figure 6 shows the structure of Infrax in 2009 and 2010 on the basis of the share held by each DSO in Infrax. Ores was incorporated on 6 February 2009. It is the operator responsible for the distribution networks for the eight mixed DSOs in Wallonia (IDEH, IEH, IGH, Interest, Interlux, Intermosane, Sedilec and Simogel). Figure 7 shows the structure of Ores in 2009 and 2010 on the basis of the shares of each DSO in Ores. BNO (Brussels Network Operations) performs duties at the instruction and on behalf of the mixed DSO for Brussels, Sibelga.


f) Studies carried out by the Management Board in 2010

Figure 5: Structure of Eandis in 2009-2010 on the basis of the shares per DSO in Eandis

Studies on the purchase of energy to offset energy losses by DSOs

2.51% 16.60%

19.43%

gaselwest imea imewo intergem 13.76%

iveka iverlek sibelgas

14.34% 22.42%

Source: CREG

10.95%

Figure 6: Structure of Infrax in 2009-2010 on the basis of the shares per DSO in Infrax 8.33%

59.38%

22.00% 19.79%

Having analysed the various purchase contracts, the CREG noted that free competition for the allocation of the public contract for the purchase of energy to offset the network losses is limited in particular by the need for a regional supply permit and the power of the historic shareholder. As of 2009, the first year of the 2009-2012 regulatory period, the costs of network losses are moreover considered to be non-manageable, which takes away the incentive for the DSOs to scrupulously follow the market so as to obtain a more advantageous price.

12.50%

14.00%

In April 2010, the Management Board published a study on the purchase of energy to offset energy losses by DSOs between 2006 and 200833. This study analyses the energy purchase contracts to offset energy losses on the electricity distribution network. The purchase of this energy represents one of the costs of the DSOs that are included in their tariffs proposals and in their annual report, enabling the CREG to monitor tariffs. The CREG notes purchase prices that sometimes differ greatly from one tariff proposal to another. The competitive process should be more efficient for the supply of this energy given the substantial volumes and technical characteristics involved.

64.00% inter-Energa

iveg

infrax West

PBE

Source: CREG

Figure 7: Structure of Ores in 2009-2010 on the basis

In December 2010, the Management Board carried out two studies on the comparison between, on the one hand, the prices paid by the mixed DSOs within Eandis and Ores to buy energy to offset active losses on their regional networks and, on the other hand, the energy prices paid by large industrial clients during the 2009 operating year.

of the shares per DSO in Ores

In its study on Eandis34, the Management Board noted that the purchase prices paid by the DSOs were, generally speaking, in line with those charged by the main suppliers operating in Belgium during the 2009 operating year to their large industrial clients with comparable supply characteristics.

5,61% 26,10%

15,53%

Ieh Ideg Igh Interest

4,92%

Interlux Intermosane 7,80%

13,29%

2,85% 23,90%

Sedilec Simogel

Source : CREG

In its study on Ores35, the Management Board noted that the prices obtained for each of the batches subscribed individually by each of the DSOs are substantially higher than the commodity prices billed by the main suppliers operating in Belgium during the 2009 operating year to their large industrial clients with comparable supply characteristics. The excessive nature of the prices obtained is due partly to the adjudication procedure followed by Netmanagement and the need for potential suppliers to offer a fixed price by which they are bound for several weeks.

33 Study (F)100401-CDC-958. 34 Study (F)101208-CDC-1001. 35 Study (F)101208-CDC-1005. CREG Annual report 2010

25


Studies on injection tariffs for high-quality renewable energy production and cogeneration plants In response to the request of the Minister for Energy, in April 2010 the Management Board conducted a study on the injection tariffs applied by certain DSOs, more specifically on the desirability of a possible exemption from or abolition of injection tariffs in favour of high-quality renewable energy production and cogeneration plants36. The Minister also asked the CREG to examine the possible impact thereof on the costs for various types of standard customers. This study first of all stresses that any modifications made to the legal framework which would lead to (full or partial) exemption from or abolition of injection tariffs can only be applied as of the next regulatory period, that is 2013-2016. The study then goes on to demonstrate that, although a certain degree of clarification of the existing legislation is desirable, there are no legal obstacles to billing injection tariffs. In addition, the Management Board worked out a number of scenarios on the basis of a selection of standard customers (Eurostat). The impact of a full and partial exemption from injection tariffs on standard customers is calculated on the basis of two scenarios. In view of the analyses carried out and given that the injection tariffs can play a significant role as a policy instrument in endeavouring to achieve an economic and social optimum in the context of the modernisation of the distribution networks, the Management Board argues in favour of maintaining injection tariffs in the legislation on tariffs. In July 2010, the Management Board conducted a followup study on the billing of injection tariffs for decentralised producers where tariffs reflect the connection costs and network use37. As regards the connection tariffs, the study argues in favour of reflective costs. The obligation incumbent on decentralised producers to pay the connection tariffs they generate provides an incentive for localisation. The possible application of percentage reductions to connection tariffs may be considered. These reductions must, however, be objective and in accordance with the law. Connection tariffs that reflect the costs incurred imply adaptations to the regulations in Flanders, for example. As regards the use of the network itself (injection tariffs), the study suggests billing these costs to the decentralised

producers who cause them. This means that the ‘system management, ‘measuring and metering’ and ‘ancillary services – network losses’ tariff components would still be billed, but the ‘basic tariff for network services’ and ‘levies and surcharges’ – provided the connection tariffs actually reflect the costs – should be abolished. This would require an adaptation of the Royal Decree of 2 September 2008. It should also be noted that in June 2010 Electrawind filed an appeal for annulment against the application of injection tariffs to the Constitutional Court. Finally, in December 2010 the Flemish Parliament adopted a decree with a view to avoiding injection tariffs for electricity generated using high-quality renewable energy sources and cogeneration38. This decree stipulates that the local distribution network or TSO carries out free of charge all the duties needed for the injection of electricity generated using highquality renewable energy sources and cogeneration, with the exception of connection to the local distribution or transmission system. The costs borne by system operator in this case are considered to be costs resulting from the public service obligations of the system operator as such. Study on the development of the fixed term and/or capacity in the distribution network between 2003 and 2009 As regards electricity, the Management Board concluded in this study conducted in December 201039 that the kW term developed along virtually the same lines between 2003 and 2009, for both the tariff for the use of the network and for the total annual costs of the distribution network, and that consequently no notable change in the allocation of costs occurred between kWh and kW. The downward trend in costs attributed to kW compared with the total budget is accentuated by the fact that the DSOs’ budgets which are allocated to kWh have risen significantly over the past few years (effects of jurisprudence, the extension of public service obligations and multi-annual regulation), which has led to a continued decline in the relative share of the kW term. As regards natural gas, as for electricity, the study concludes that the kW term developed along virtually the same lines between 2006 and 200940, for both the tariff for transfer by the network and the total annual costs of the distribution network and that consequently no notable change in the allocation of costs occurred between kWh and kW. The

36 Study (F)100401-CDC-959. 37 Study (F)100708-CDC-977. 38 Decree of 23 December 2010 amending the decree on Electricity of 17 July 2000 and the Decree of 8 May 2009 on energy, with a view to avoiding injection tariffs for electricity generated using renewable energy sources and high-quality cogeneration (Belgian Official Journalof 20 January 2011). 39 Study (F)101202-CDC-1020. 40 Given that the CREG only approved tariffs for natural gas as of 2004 and that examination has shown that the kW term was not used before 2006, the results given are limited to the period 2006-2009.

26



relative share attributed to the kW term compared with the total budget of a natural gas DSO is considerably higher than for electricity. This phenomenon can be explained by the fact that natural gas consumption depends far more on the outdoor temperature than electricity consumption. By maintaining the kW term, which is not linked to variations in atmospheric conditions and the resultant consumption, at a high level, the tariff fluctuations are lessened and this makes it possible to offer more stable tariffs. As regards the annual budget of the DSOs and the share allocated to kW, this share follows a relatively steady trend.

In August 2010, the Management Board approved the proposal put forward by Elia concerning the method used to assess the primary reserve capacity and the result of applying this method for 2011, but did not approve the proposal put forward by Elia concerning the method used to assess the secondary and tertiary reserve capacity and the result of applying this method for 201142. The Board asked Elia to submit another proposal for the secondary and tertiary reserve. Further to the additions and clarifications provided by Elia, the Management Board finally approved the new Elia proposal in December 201043.

g) Supplying information (tariffs, costs and connection conditions)

However, to its decisions the Management Board did add a number of considerations, amongst other things concerning the definition of a minimum tertiary reserve volume, the need for Elia to have volumes in line with the decisions taken by the CREG throughout the year, including in December, the impact of the increase in the share of production by wind farms in reserve volumes, the participation of industrial customers in the reserves and an extension of reserve monitoring.

All information is published on the websites of the network operators. This obligation is imposed by the regional and federal legislation. The tariffs approved or imposed by the CREG can be consulted on its website and on the sites of the network operators. At the request of the CREG, most of them have provided consumers with a calculation module that can be used to make a detailed estimate of their transmission and distribution tariffs. B. Maximum prices Readers are referred to paragraph 4.1.2.B of this report.

Prices and volumes for ancillary services offered by service providers On 2 July 2010, the Management Board received the Elia report on the bids for ancillary services for 2011. The ancillary services concerned include voltage adjustment and active losses in Elia’s grids with a voltage of less than or equal to 70 kV. The other ancillary services will still be covered by multi-annual contracts in 2011.

C. Ancillary services and balancing Reserve capacity Given that it was impossible to acquire the secondary reserves required for 2010 and 2011 at reasonable prices from the producers in 2009, the Minister for Energy imposed price and volume conditions for the supply of the secondary adjustment by various producers in 2010 and 201141. In accordance with the federal network code for the management of the electricity transmission system and access to this system (Royal Decree of 19 December 2002), Elia has to assess and determine the primary, secondary and tertiary reserve capacity that contributes towards ensuring the security, reliability and efficiency of the transmission system in the control area. It has an obligation to inform the CREG of its assessment methodology and the results obtained for approval.

On the basis of this report, in August 2010 the Management Board approved a reasoned report44 which it transmitted to to the Minister for Energy and to Elia, as required by law. In this report, the Management Board concluded that the bids for voltage adjustment are not blatantly unreasonable. The report also states that it is not possible to reach a conclusion on the prices for the entire volume which Elia estimates is necessary to cover the losses of its regional network in 2011, or to assert at the moment that all the prices resulting from the auction session organised by Elia to cover the losses of its regional network in 2011 are not blatantly unreasonable. It may also be observed that the law allows for the possibility of assessing this price ex post, when the operating balances for the current tariffs period are examined.

41 Ministerial Decree of 24 December 2009 imposing price and supply conditions for the supplying in 2010 and 2011 of secondary adjustment by various producers (Belgian Official Journalof 31 December 2009). 42 Decision (B)100826-CDC-982. 43 Decision (B)101223-CDC-1027. 44 Report (RA)100826-CDC-983.


27


This reasoned report from the CREG also contains a section on the assessment of prices for the secondary reserve for 2011 imposed by ministerial decree45. This evaluation was undertaken in application of Article 4, §2 of the Royal Decree of 11 October 2002 on public service obligations on the electricity market. The results of this evaluation led to the conclusion that there was no need to review the prices imposed. A second evaluation was carried out at the end of December 2010 which resulted in similar conclusions.

The HHI index relating to secondary and tertiary reserves on generating units amounted to 3,750 in 2010 compared with 5,800 in 2009. Activations relating to these resources accounted for 97.9% of the total energy activated in 2010 to offset imbalances in the control area, whereas in 2009 they accounted for 99.0%. The fall in the HHI index can be explained primarily by the entry onto the market in 2010 of production reserves from a third player, E.On.

Balancing Price of energy to offset imbalances The TSO is responsible for monitoring, maintaining and, if need be, re-establishing the balance between supply and demand for electrical power in the control area, amongst other things further to any individual imbalances caused by the various Access Responsible Parties. In accordance with the network code, Elia has to submit a proposal for market operating rules intended to offset any 15-minute imbalances to the CREG for approval. In December 2010, the Management Board approved the proposal from Elia for 201146. The proposed mechanism came into force on 1 January 2011.

The imbalance tariff is based on a two-price system taking into account the direction of the imbalance of the Access Responsible Party and the direction of the imbalance in the control area. The table below provides an overview of the trend in the average price (unweighted) for positive imbalances (injection>offtake) and the average price (unweighted) for negative imbalances (injection offtake

€/MWh

22.00

43.31

19.86

28.48

Injection < offtake

48.67

78.06

44.25

57.34

Source: Elia data

Figure 8 below can be used to compare these average prices with the trend in average prices on the Belpex DayAhead market over the same period. It may be observed that in 2010, compared with 2009, the average imbalance tariffs rose more quickly than the average price of the Belpex DAM for both positive and negative imbalances.

45 Ministerial Decree of 24 December 2009 imposing price and supply conditions for the supplying in 2010 and 2011 of secondary adjustment by various producers (Belgian Official Journalof 31 December 2009). 46 Decision (B)101223-CDC-1028. 47 Source: Elia data.

28



Figure 8: (Unweighted) average price of imbalances and Belpex DAM price during the period 2007-2010 (in €/MWh) 90 80 70 60 50 40 30 20 10 0 2007 2008 2009 2010 Injection > offtake

Injection < offtake

Belpex

D. G eneral terms and conditions of Access Responsible Party contracts As regards the Access Responsible Party contracts proposed by Elia to network users, in 2010 the Management Board issued five decisions approving a certain number of modifications to the general terms and condition of these contracts proposed by Elia, concerning respectively: • the adaptation of definitions, the allocation of a balance perimeter, the harmonisation of deadlines in the appointment procedure with a view to coupling markets in the CWE region48; • the adaptation of the coefficient for offsetting active losses on the transmission system during the year and the adaptation of the balance perimeter should the buy/sell contract relating to the production deviations of the offshore wind farms be suspended49; • the harmonisation of deadlines in the nomination procedure50; • the introduction of continuous and implicit allocation organised by the Belpex and APX Intraday electricity exchanges on the Belgian-Dutch border51; and • the clarification of the principles for the determination of the balance perimeter of an Access Responsible Party whose portfolio includes an access point to the network from which a customer provides an interruptibility service in the presence of local generation operations at the same site52.

Sources: Elia and Belpex data

Moreover, the Management Board decided to withdraw decision (B)030320-CDC-130 of 20 March 2003 on the general terms and conditions of the provisional agreement for the non-exclusive use of Elia’s grid by eligible users connected to the distribution networks established in the Walloon Region or the Brussels Region53. Appeals for annulment had been filed with the Council of State against this decision of 20 March 2003 and in its report the Council of State Auditor concluded that a number of the arguments developed by the applicants were legally valid, in particular the ratione temporis power of the CREG to adopt the decisions under attack, as the Act of 20 March 2003 amending the Act of 29 April 1999 had not yet entered into force at the time the decision was taken. Taking note of this point of view, and without any acknowledgement as to whether the other arguments raised by the claimants are legally valid or not, the CREG decided to withdraw the aforementioned decisions, in application of the general theory of the withdrawal of administrative acts.

3.1.3. Effective unbundling Unbundling of TSO At federal level (voltage above 70 kV), there is only one TSO, i.e. Elia System Operator, appointed on 13 September 2002 for a period of twenty years. Elia is also the TSO at local level (grids from 30 to 70 kV).

48 Decision (B)100422-CDC-963. 49 Decision (B)100812-CDC-981. 50 Decision (B)100930-CDC-988. 51 Decision (B)101125-CDC-1019. 52 Decision (B)101202-CDC-1024. 53 Decision (B)101022-CDC-658E/17. CREG Annual report 2010

29


The TSO controls the physical assets of the transmission system, as it controls Elia Assets, which owns the physical assets. Current Belgian legislation provides for the legal, functional and accounting unbundling of the system operator but does not stipulate any obligation for total ownership unbundling. The main provisions with regard to unbundling for the system operator are laid down in the Electricity Act and the amendments brought by the Act of 1 June 2005, as well as the Royal Decree of 3 May 1999 on the management of the national electricity transmission system. The provisions in question relate to the legal structure, the composition of the bodies of the company and its activities. Belgian legislation forbids the TSO from taking out direct or indirect stake in the shareholding body of the producers, distributors, suppliers and intermediaries.

than those rendered necessary by its coordination activity as TSO. Nor is it allowed to engage in the activities of a DSO for voltages below 30kV. The system operator may undertake any activity on Belgian soil or abroad that is in line with its object. These activities may not, however, have a negative effect on its independence or on the accomplishment of the assignments it has been entrusted with. In 2010, no modifications were made to the unbundling rules that apply to the electricity grid TSO. The structure of the Elia shareholding body as at 31 December 2010 is shown in Figure 9. On 14 October 2010, Elia and TenneT transferred to APX-Endex their respective stake in the Belgian energy exchange Belpex, i.e. 60% for Elia and 10% for TenneT. At the same time Elia acquired a 20% holding in the capital of the APX group, in which TenneT is the main shareholder.

In its capacity as a system operator, Elia is not permitted to engage in any power generation or sales activities other

Figure 9: Shareholding body of Elia as at 31 December 2010

Free float*

Publi-T

Publipart

52.10%

45.37%

2.53%

Elia System Operator

Elia Asset 99.99% Economic unit

CASC-CWE

HGRT

Coreso

Elia Re**

Elia Engineering**

APX-Endex

Eurogrid Int.

14.28%

24.50%

22.49%

100%

100%

20%

60%

* The Arco Group announced on 29 June 2010 that it holds 8.79% of the Elia shares. ** Elia System Operator owns one share in Elia Re and one share in Elia engineering.

30


Source : site Internet Elia


Developments in the first half of 2010

3.2. Competition aspects

On 31 March 2010, the Elia Board of Directors approved the agreement concluded between Elia, Publi-T and Electrabel/ GDF/SUEZ on the terms and procedures for the withdrawal of Electrabel from the capital of Elia. Under the terms of this agreement, Electrabel is selling 12.5% of the Elia capital to Publi-T. This will bring Publi-T’s stake in the capital of Elia to 45.37%.

3.2.1. Description of the wholesale market

Independence of system operator – Corporate Governance The CREG examined and commented on the activities report from the Elia corporate governance committee for 2009 (checking the application of Articles 9 and 9ter of the Electricity Act and assessing effectiveness with regard to the objectives of independence and impartiality of the transmission system management). In 2010, the Management Board issued a binding opinion on the appointment of an independent administrator within Elia to replace Ingrid Lieten54. The report from the Compliance Office describing the measures taken by Elia during 2009 to ensure that all discriminatory practices are ruled out and ensuring appropriate monitoring of the programme of commitments provided for by Article 8, §2 of the Electricity Act was examined by the CREG, which did not have any observations to make on this matter.

A. Electrical power demand According to the statistics passed on to the CREG55, the electrical power demanded by Elia’s grid excluding pumped storage, in other words the net consumption plus grid losses, was estimated at 84,733 GWh in 2010, compared with 80,194 GWh in 2009, which would mean an increase of approximately 5.66%. The demanded peak capacity was estimated at 13,585 MW56, against 13,320 MW in 2009. Figure 10 provides an overview for the period 2007 to 2010 of the average consumption on a monthly basis in the Elia control area. After a sharp fall in electricity consumption in October 2008 as a result of the economic crisis, which continued in 2009, consumption rose again in early 2010. Although these figures are not adjusted to factor inthe temperature in the month in question, they do reflect the trend well. These consumption data do not entirely take into account local generation. It is presumed that this local generation is increasing year on year. For 2009, Synergrid estimates local generation at 7.9 TWh, or almost 10% of total consumption. The CREG does not have any more recent data at the moment.

Figure 10: Average consumption on a monthly basis in the Elia control area for the 2007 to 2010 period (in MWh/h) 11.500 10.998

11.000 10.976 10.871

10.500

10.413

10.240

10.000

9.761 9.500

9.628 9.302

9.000

9.444

9.344

8.819

8.500

8.774

8.000

1

2

2007

2008

3

4

2009

2010

5

6

7

8

9

10

11

12

Source: Elia data, CREG calculations

54 Opinion (A)100318-CDC-955. 55 These statistics have been supplied by Elia and do not cover the total electrical power demand in Belgium as they do not take into account the small local generating units for which Elia does not take any measurements ( 5 years 60,3%

Other contracts > 1 year 9.4% Contracts with producers < 5 years 5,7% Source: CREG

58


Overall, the individual supply portfolios of the various natural gas suppliers result in a differentiated supply depending on the type of contract. The share of long-term contracts concluded directly with natural gas producers has declined, falling from 71.3% in 2009 to 60.3% in 2010, but still constitutes the main component. 2010 saw a shift towards supplies on the wholesale market.

4. Regulation and operation of the natural gas market

B. Holders of a natural gas supply permit The companies operating in the supply of natural gas on the Belgian market can be broken down as follows:

Table 14: Companies operating in the supply of natural gas on the Belgian market in 2010 Volume routed in 2010 (TWh) Company

Domestic market

Date of permit

Domestic market

Belgium*

Elsewhere

Total

Market share in Belgium**

E.On Ruhrgas A.G.

Germany

30.03.07

526.1

0

167.5

693.6

0%

Distrigas S.A.

Belgium

02.03.09

n.d.

112.1

n.d.

n.d.

52.1 %

France

26.05.09

n.d.

39.3

n.d.

n.d.

18.3 %

United Kingdom

13.06.07

5.57

0

4.91

n.d.

0%

Germany

03.09.07

184.0

10.6

11.0

205.6

4.9 %

Netherlands

02.11.07

88.9

1.25

0

90.1

0.5 %

France

31.01.08

0

0

0

0

0%

Belgium

01.10.08

n.d.

0

0

n.d.

0% 0.7 %

GdF Suez Total gas & Power North Europe Ltd. WINGAS GmbH & Co KG RWE Supply & Trading Netherlands B.V. Gaselys S.A.S. Nuon Belgium S.A. Vattenfall Energy Trading Netherlands N.V.

Netherlands

04.11.08

63.5

1.55

4.0

67.5

Electrabel Customer Solutions S.A.

Belgium

18.09.03

0

0

0

0

0%

SPE S.A.

Belgium

12.03.07

-

18.87

0

18.87

8.8 %

Electrabel S.A.

Belgium

16.03.04

0

19.14

0

0

8.9 %

France

29.11.05

n.d.

0

n.d.

n.d.

0%

Belgium

29.11.05

n.d.

2,35

n.d.

n.d.

1.1 %

EDF S.A. EDF Belgium S.A. Essent Belgium S.A. Merril Lynch Commodities (Europe) Ltd. Statoil ASA

Belgium

29.11.05

n.d.

0

n.d.

n.d.

0%

United Kingdom

09.06.06

n.d.

0

n.d.

n.d.

0%

Norway

28.09.09

n.d.

3.72

44.5

n.d.

1.7 %

Netherlands

16.07.07

n.d.

1.06

n.d.

n.d.

0.5 %

E.On Belgium S.A.

Belgium

03.09.07

0

0.05

0

0.05

0.02 %

Delta Energy B.V.

Netherlands

02.11.07

n.d.

0

n.d.

n.d.

0%

Eneco België B.V.

Air Liquide Technische Gassen B.V.

Netherlands

20.12.07

n.d.

0

n.d.

n.d.

0%

ConocoPhillips Ltd.

United Kingdom

18.02.08

10.8

0

n.d.

n.d.

0%

Gazprom Marketing & Trading Ltd.

United Kingdom

18.04.08

160.9

0

8.4

n.d.

0%

Lampiris S.A.

Belgium

04.11.08

0

2.62

0

2.62

1.2 %

RWE Energy Belgium S.P.R.L.

Belgium

27.07.09

0

1.06

0

1.06

0.5 %

E.On Energy Trading S.E.

Germany

28.09.09

137.3

1.54

n.d.

168.5

0.7 %

United Kingdom

20.11.09

183.2

0

64.7

n.d.

0%

Energy Logistics and Services GmbH

Austria

13.04.10

n.d.

0

2.25

n.d.

0%

Gas Natural Europe SAS

France

12.05.10

n.d.

0

n.d.

n.d.

0%

natGas A.G.

Germany

27.08.10

23.2

0

0.72

23.9

0%

Progress Energy Services S.P.R.L.

Belgium

22.12.10

n.d.

0

n.d.

n.d.

0%

Exxon Mobil Gas Marketing Europe Ltd.

* T hese figures only bear on the transmission market: supplies to customers connected to the transmission system and to offtake points on the distribution networks. For separate statistics on supplies on the transmission and distribution markets, please consult the joint publication of the four energy regulators at www.creg.be. ** Relates to the respective market shares of the holders of a supply permit for access to the transmission system, on the basis of the figures in the “Belgium” column. These market shares are average values for 2010 and do not necessarily reflect the situation on 31 December. Source: CREG

In 2010, total natural gas consumption113 rose to 215.3 TWh, up 10.9% compared with consumption in 2009 (194.2 TWh). This increase was the result of a considerable rise in consumption by end customers connected to the

distribution networks (+ 15.5%) and consumption by industrial customers (+ 19.7%) on the one hand and more or less stable consumption for the generation of electricity (and the production of heat) (-0.3%) on the other.

113 It should be noted in this respect that the evaluation is based on figures linked to shipping activities on the transmission system as provided by the transmission system operator.


59


In 2010, four new players, Electrabel, RWE Energy Nederland, whose activities were taken over by its sister subsidiary RWE Energy Belgium during the course of the year, Vattenfall Energy Trading Netherlands and E.On Energy Trading began to supply on the wholesale market for natural gas, which includes supplies to direct customers connected to the Fluxys grid as well as supplies to distribution networks. As a result, in 2010 a total of fourteen supply companies were operating on the Belgian market.

marketing on the distribution networks by Electrabel Customer Solutions from Distrigas. As at 1 January 2011, twenty-nine network users held a routing supply permit. Fourteen of them had actually reserved capacity for the delivery of natural gas to the Belgian market on the Fluxys network, compared with six at the end of 2007.

C. Natural gas transmission permits The share held by Distrigas on the transmission market fell sharply in 2010 to 52.1% The reduction amounts to -17.9 percent, which represents the biggest drop since the liberalisation of the market. GDF SUEZ has consolidated its position as the second largest shipper on the market (+ 5.9 percent), with a share of 18.3%. SPE continues to make progress and gaines 1.9 percent, taking its market share to 8.8% Despite its growth, SPE had to yield its third place to newcomer Electrabel. Electrabel attained a market share of 8.9% at a single stroke, thereby stepping up to become the third largest shipper thanks mainly to its share in the electricity generation sector. It is worth noting that as of the month of November parent company GDF SUEZ took over the Electrabel routing activities. The GDF SUEZ group holds a total of 27.2% on the transmission market. Wingas is the second largest loser after Distrigas (-1.1 percent) and has seen its market share fall to less than 5%. Statoil also lost ground in 2010 (-0.2 percent compared with 2009). Lampiris has a market share of 1.2%. Among the other newcomers in 2010, Vattenfall Energy Trading Netherlands, which operates only on the L-gas distribution network, has a market share of 0.7%, while RWE Energy Belgium has slightly less than 0.5%, again mainly on the L-gas distribution networks. E.On Energy Trading, which started routing in the middle of the year, has reached a market share of 0.7%. Among the players with a (temporarily) limited market share, that of EDF Belgium has risen by 0.2% to 1.1%, while that of Eneco België has fallen by 0.2% to 0.5%. EDF Belgium transferred its commercial activities to SPE on 1 October 2010. E.On Belgium has seen its market share fall to just 0.02%. Essent Energy Trading, whose name has been changed into RWE Supply & Trading Netherlands, maintains its market share at 0.6%. As expected, the consequences of the merger between GDF and SUEZ strongly impacted on developments on the transmission market as of 2010. This can be seen in the activities of Electrabel, which was taken over at the end of the year by its parent company GDF SUEZ. Given that the activities of Electrabel have provisionally been focused primarily on the generation of electricity, it may be deduced that mutual relations between the market players will undergo further significant changes in the future. It is expected that GDF SUEZ will partly take over the transmission of gas intended for

The CREG has the power to issue opinions on transmission permits with regard to the transmission system. To build and operate its natural gas facilities, Fluxys submits applications for transmission permits to the Energy Authority in place with the Federal Public Service of the Economy, SMEs, SelfEmployed and Energy. The CREG issues an opinion on this. For applications that impact on the distribution networks, the CREG consults with the regional regulators concerned. In 2010, eleven Fluxys transmission permit applications were passed on to the CREG for an opinion. A favourable opinion was given in each case. The Management Board also returned three opinions on applications submitted in 2009.

D. Exchange platforms Setting out from the work done in 2009, on 10 October 2010 ERGEG gave its final approval of the 2010 monitoring report drawn up by the CREG on the “regulatory oversight of natural gas hubs”114. This report presents a series of conclusions drawn from the analysis of gas hubs in Europe. The main aim of this exercise was to compile a list of the various monitoring mechanisms on the European hubs. In addition, the document puts forward a few recommendations intended to improve surveillance and regulatory monitoring. Moreover, the European Commission has drawn up a proposal for a regulation on the integrity and transparency of the energy market (REMI). This proposal aims to introduce great transparency on the market by imposing clear market rules for energy traders. The wholesale markets such as the exchanges and hubs, where gas and electricity are exchanged between producers and traders, take on more importance in terms of the prices paid by end customers. The new rules proposed relate to the identification and use of “privileged” information on transactions that send out incorrect and misleading signals to the market and on the spreading of false rumours that give out misleading signals. The task of monitoring these rules is to be entrusted to ACER, the European Agency for the Cooperation of Energy

114 http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_ERGEG_PAPERS/Gas/2010/E10-GMM-11-03%20Gas%20Hub%20Monitoring%20Report%20 2010_final.pdf.

60



Regulators. This agency is to work closely with the national regulators, who bear joint responsibility for examining suspicious cases and who will have to impose penalties where necessary. For Belgium, this mainly concerns trading on the Zeebrugge hub and the APX GAS ZEE gas exchange. While activity on the gas exchange may be considered rather minimal (only ten or so transactions in an entire year), Huberator, as the hub operator, noted growing interest in 2010. Eightytwo companies are currently registered as members. And while the total volume traded at the hub in 2010 remained constant compared with 2009 (62 bcm or 742 TWh), churn doubled in the last few months of 2010. The churn factor, which represents the number of times the gas is traded before being physically taken elsewhere, proved to be higher than 10 for the first time since the hub was created. Generally speaking, this is seen as a positive increase in liquidity in short-term trade. In any case, the Dow Jones Zeebrugge Index Gas (ZIG) reflects a price that is again moving closer to the level recorded in 2008, before the current crisis struck. It may therefore be said that the extremely low short-term price seen in 2009 is coming to an end.

E. Integration with intra-European regions and neighbouring member states The third European legislative energy package makes regional cooperation between regulators compulsory. The question of how this cooperation was to be organised and/or whether the existing platforms or initiatives were able to participate in this was the subject of discussions in 2010. First of all, the gas regional initiative for the north-west region (GRI-NW) issued an initial proposal during the stakeholders group meeting on 26 November 2010 in Brussels. The bottom-up approach so much appreciated in the past through various projects remains an important pillar, but in future will need to be accompanied by monitoring and the top-down implementation of network codes which will result from the third legislative package. The cooperation cautiously introduced between the member states and the European Commission continues to be supported.

of supply. In addition, pilot projects are only possible on the basis of network codes and key guiding threads. The discussions on this Commission communication, which began in July 2010 during the fourth “Regional Initiatives”116 conference, are to continue in 2011. The topics discussed at this conference also included the objective of a fully coupled market for electricity (by 2015) and natural gas. These discussions did not, however, prevent regional initiatives from recording results in their current form. The North/ North-West of Europe gas region (Belgium, The Netherlands, France, Germany, Great Britain, Ireland, Northern Ireland, Denmark and Sweden) focused its activities around three areas in 2010, i.e. investments, the secondary market and capacity (short-term primary market). In addition to the regional cooperation initiated by the regulators, the CREG participated in the gas platform that brings together the authorities, the regulators and the TSOs of five countries (The Netherlands, Luxembourg, France, Germany and Belgium). Again in the wake of the Ukraine-Russia crisis, the gas platform focused its work on the issue of the security of supply. The processes, models and interventions at European level were applied specifically to the five countries with a view to gaining a better understanding of the impact for each of the countries concerned. The last two meetings discussed the impact of the third legislative package on the rules in force in each of these five countries. The strategic discussions do not prevent the markets from functioning or continuing to develop. The hubs and exchanges in the region around Belgium, including the Zeebrugge hub in Belgium, posted similar sustained growth in 2010, as well as rising liquidity. The only noteworthy fact is the doubling of the churn factor at the Zeebrugge hub. This is an indication of the number of times gas is exchanged before being physically taken elsewhere. Since October 2010, which was the start of the new gas year, this has risen from 5 to 10. Analysis shows that this doubling is not due to an increase in the volume exchanged (this remains constant), but rather to the fact that the physical quantity going through the hub has fallen by half.

On 7 December 2010, the European Commission published a communication115 presenting other emphases or even an adaptation of a number of regional geographic zones (but which leaves the GRI NW region unchanged). A new Steering Committee, bringing together representatives of the Commission, the member states and the regulators, could play a central role here. Subject matters to be dealt with, which would be imposed on a top-down basis, relate to investments in infrastructure, regional balancing and security

115 COM(2010)721 final: Communication from the Commission to the European Parliament and Council on the future role of regional initiatives. 116 http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EERINITIATIVES/Regional. CREG Annual report 2010

61


Figure 25: Natural gas supplies by type and length of contract 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000

2001

2002

2003

2004

short-term supply (spot) and contracts of less than one year contracts of less than one year concluded with other suppliers contracts concluded with producers that end in five years contracts concluded with producers that last more than five years

F. Integration between gas producers/importers and suppliers – long-term gas supply contracts For the 2010 breakdown, readers are referred to paragraph 4.2.1.A of this report and Figure 25 above.

G. Access to natural gas storage facilities A systematic lack of gas storage capacity may be observed in Belgium. The Gas Act stipulates that access to the storage facilities is reserved as a priority for companies that supply end customers connected to the distribution networks. There is no freely available storage capacity. In 2007, Fluxys started an extension project intended to increase the underground storage capacity in Loenhout. In practical terms, the useful storage capacity will be gradually increased from 600 to 700 million cubic metres (i.e. by 15%), over a period of four years (2008 – 2001). The extension work is on schedule, which means that storage users will benefit from a useful volume of around 700 million cubic metres by the 2011-2012 storage season. Fluxys is also seeking to increase flexibility in the use of storage: the issue capacity of the Loenhout facility rose from 500,000 to 600,000 cubic metres an hour on 1 November 2010 and the injection capacity rose from 250,000 to 325,000 cubic metres an hour on 1 July 2010.

62


2005

2006

2007

2008

2009

2010

Source: CREG

In 2010, the transmission company continued to offer flexibility services for storage in the short term by using the virtual storage concept. At the request of the CREG, the formula used will contribute towards simplifying access to the network for newcomers and small players. Access to the storage facilities is set by the Gas Act on the basis of the market share on the distribution market. No congestion management principle or CMP is therefore necessary. In principle, the capacity can be traded on the secondary market, but there is no supply on the secondary market owing to the lack of available storage capacity. The capacity is offered in SBUs (Standard Bundled Units). Storages users are provided with information about the storage capacity, the injection and emission capacity and parameters relating to the availability of the storage facility. This information is available on a daily basis.


H. Developments in terms of market concentration In 2010, a total of fourteen supply companies were operating on the Belgian market. Total natural gas consumption rose to 241.7 TWh, an increase of 10.6% compared with consumption in 2009 (194.2 TWh). The merger between GDF and SUEZ and the fulfilment of the conditions imposed by the European Commission following approval of the merger in 2008 had a profound impact on the way the market developed in 2010 and in particular on the market shares of Distrigas and the GDF SUEZ group on the gas transmission market. With a market share of 52.2%, Distrigas remained the dominant player in 2010. The table below shows two major groups, ENI Distrigas and GDF SUEZ. The concentration is measured using the HHI index117.

Figure 26: IGH-Electrabel household customer – 2010. 19,00%

Energy Transmission Distribution (not including public offtake)

0,96%

Public offtake Energy tax and VAT

25,70% 51,98%

Source: CREG

2,37%

Prices charged to household end users rose compared with 2009.

Table 15: M arket shares on the transmission system from 2007 to 2010

2007 %

2008 %

2009 %

2010 %

ENI Distrigas

78.2

72.4

70.0

52.1

GdF Suez

15.2

13.0

12.4

27.2

Wingas

6.0

6.6

6.0

4.9

EDF SPE

0.1

6.5

7.8

9.9

Other (< 2%)

0.5

1.6

3.9

5.7

6,400

5,500

5,200

HHI

establish the contribution made by the various components to the way in which prices have developed. The components and the relative share in the price charged to the end user are shown in the graph below.

3,600 Source: CREG

I. Mergers and acquisitions The acquisition by Publigaz of all Electrabel shares in Fluxys, as provided for in the agreement concluded on 23 March 2010 between Publigaz and Electrabel and as developed in the buy-sell agreement of 30 April 2010, took place on 5 May 2010. Consequently, Publigaz owns a total stake of 89.97% in Fluxys. See also paragraph 4.1.3. of this report.

J. Price trends Household customers

Like electricity, following the sharp increase in 2008 and the downturn in 2009 (caused mainly by the economic crisis and its impact on the commodities markets, further strengthened by the surplus supply of natural gas on international markets after the discovery of shale gas and the over-capacity of LNG), natural gas increased again in 2010, without however reaching the 2008 level. In 2009-2010, we also observed a decoupling of natural gas prices from the price of oil. This decoupling proved advantageous during the period 2009-2010 for suppliers who buy their natural gas on the spot market, such as Lampiris. The trend in suppliers’ prices, which varies from one supplier to another, lies behind the increase seen in 2009-2010. This increase is, however, partly offset by the fall in transmission tariffs and the reduction in levies. The transmission tariff is 15% lower than in 2009, which corresponds to a fall of € 0.24/MWh. The ‘federal contribution’ and ‘protected customer surcharge’ levies have fallen by € 0.06/MWh. At the request of the Minister for Energy, the Management Board analysed the range of fixed tariffs from suppliers active on the Belgian electricity and gas market118. The conclusions of this study are set out in paragraph 3.2.2. of this report, under the heading “Study on the overview of fixed-price contracts on the household electricity and gas market.”

The study (F)101021-CDC-1004 analyses the trend in the price of natural gas for end customers since 2004 so as to 117 The HHI index (Herfindahl-Hirschmann Index) is a commonly accepted measurement of the market concentration. It is calculated by squaring the market share of each company competing on a market and adding up the figures obtained. 118 Study (F)100129-CDC-943. CREG Annual report 2010

63


Figure 27: Trend in total natural gas price – household customers (T2)

80 70 60

€/MWh

50 40 30 20 10 0 Jan 07

Apr 07

Jun 07

Oct 07

Electrabel Luminus Lampiris

Jan 08

Apr 08

Jun 08

Oct 08

Jan 09

Apr 09

Jun 09

Oct 09

Jan 10

Apr 10

Jun 10

Nuon Essent Source: CREG

Figure 28: Trend in energy price per supplier – household customers (T2) 50 45 40

€/MWh

35 30 25 20 15 10 Jan 07

Apr 07 Electrabel Luminus Lampiris

Jun 07

Oct 07

Jan 08

Apr 08

Jun 08

Oct 08

Jan 09

Apr 09

Jun 09

Oct 09

Jan 10

Apr 10

Jun 10


64



Business customers

Moreover, the Management Board also examined the relationship between costs and the prices of importers, retailers and suppliers on the Belgian natural gas market during the 2007-2009 time period119. This study is in line with the studies on the price rises for natural gas and electricity announced by Electrabel and the relationship between the costs and the prices of importers and retailers on the Belgian household and business market for natural gas over the 2004-2009 time frame120. Nevertheless, it aims to be more exhaustive in that the prices and costs of all the players on the liberalised market have been analysed with regard to imports, retail and supplies to household and industrial customers.

Business customers are seen to experience the same development as household customers because the suppliers’ price is based on the same parameters.

4.2.2. M easures aimed at preventing any abuse of a dominant position The decline in the GDF SUEZ stake in the shareholding body of Fluxys and Fluxys LNG was crucial in the fight to avoid abuse of a dominant position in Belgium (cf. paragraph 4.1.3 of this report).

The study shows that the retail margins and supply margins increased over the 2007-2009 time period compared with the period prior to liberalisation. It indicates that the only really competitive market segment seems to be the segment of supply to industrial customers, which is showing a gradual decline in market share of the historical operator in favour of various suppliers. As regards household customers, the study deplores the inertia of most consumers on the one hand, but also the lack of dynamism among most suppliers on the other. With one exception, these suppliers still used the indexation formulas from the captive market and based on oil contributions whereas indexation on the basis of the gas contributions has been more advantageous for customers since the start of 2009.

Liquidity on the wholesale market Given that the Belgian market is one of the markets most connected with its neighbouring countries in Europe, liquidity in Belgium is closely linked to the development of the markets in these countries. The efforts made by the CREG in terms of promoting liquidity are therefore mainly undertaken at a European regional level.

Figure 29: Energy price trend per supplier – business customer (T4) 50 45 40

€/MWh

35 30 25 20 15 10 Jan 07

Apr 07 Electrabel Luminus Lampiris

Jun 07

Oct 07

Jan 08

Apr 08

Jun 08

Oct 08

Jan 09

Apr 09

Jun 09

Oct 09

Jan 10

Apr 10

Jun 10


119 Study (F)101014-CDC-992. 120 Studies (F)070727-CDC-704 of 27 July 2007 and (F)091001-CDC-921 of 1 October 2009.


65


Given that the Belgian market is one of the markets most connected with its neighbouring countries in Europe, liquidity in Belgium is closely linked to the development of the markets in these countries. The efforts made by the CREG in terms of promoting liquidity are therefore mainly undertaken at a European regional level. The infrastructure improvements to be brought into service over the next few years will underpin regional interaction. In addition, in 2010 the Management Board finalised the ERGEG study on better practices for gas hub monitoring started in 2009121. Among other things, the study names the Zeebrugge hub as the only non-regulated hub in Europe. In this respect, Belgium therefore has a considerable amount of ground to make up. Further to the recommendations made in this ERGEG study, the CREG: • will work on the installation of a single hub for the Belgian balancing zone. The fact that this situation has arisen is due not only to the de facto monopolistic situation of the hub, but also to the fact that the fragmentation of liquidity on the market must be avoided to promote competition; • will continue to argue for the regulator to have an overall view of the hub, the main purpose being to be able to guarantee non-discrimination in terms of access conditions. It is important to take account of the fact that this overall view does not disrupt commercial activities; • will endeavour to draw up new rules concerning the rights and responsibilities of each party so as to guarantee that the hub functions efficiently and constantly and that information is circulated as best as possible; • will continue to stress the need to adapt the range of services on offer to the needs of the market to a better standard and and to adapt to the best practices that can be found in Europe; • will argue in favour of guidelines in the field of transparency and the provision of information concerning the gas hub. The data should be accessible in the same way to all the members of hubs, whether or not they undertake any physical activities.

The dependence on the monopolistic position of GasTerra for L-gas supplies is being curbed, which represents major progress in terms of competition. In addition to the initial problem of supply, the analysis conducted in this document revealed a problem of cost control with regard to the extension of conversion facilities and additional flexibility resources. The fewer production resources there are in the Groningen gas field, the more conversion and additional flexibility will be required in The Netherlands. It is difficult to assess the level of the conversion cost which remains acceptable owing to the fact that this cost is an intrinsic part of the transmission tariff in The Netherlands (less than 10% at the moment). In future, strict follow-up and coordination will be required. Finally, the CREG goes on to add that the availability of and access to cross-border capacity at the Hilvarenbeek/Poppel interconnection point are giving cause for concern. Long-term strategic choices will have to be made to ensure adequate firm capacity. In The Netherlands, it will not be possible to make adequate reservations in the long term to be able to maintain the required level of exit capacity for the downstream markets. The results provide a path towards a short-term solution. With this study, the Management Board undertook to demonstrate that owing to its monolithic structure, the L-gas market between The Netherlands, Belgium and France offers the most obvious opportunity to put this cooperation into practice. It will be difficult to continue to defend the inadequate processes resulting in a unilateral reduction in available capacity without taking account of the cross-border effects from a legal perspective once the underlying market requirements have been clearly demonstrated and no alternatives are available, even if these come under a different member state.

With regard to the situation within Belgium, in its study (F)100114-CDC936 on the development of a competitive regional market for low-calorific natural gas, the CREG published a new interim analysis of the priority questions linked to the Belgian L-gas market. This analysis shows that the reforms undertaken in The Netherlands seem to provide a response to the issue of the availability of L-gas, both at macroeconomic level (security of supply in Belgium) and as regards ease of availability with regard to newcomers and smaller players.

121 Monitoring Report 2010 on the regulatory oversight of natural gas hubs (http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_ERGEG_PAPERS/Gas/2010/ E10-GMM-11-03%20Gas%20Hub%20Monitoring%20Report%202010_final.pdf).

66


5. Security of supply


67


5.1. Electricity

Table 17: Breakdown of the installed capacity per type of power station connected to Elia’s grid, per type of power

5.1.1. Demand

station, as at 31 December 2010

The demand of electrical power, that is net consumption plus pumping power and grid losses, amounted to 90.1 TWh in 2007, 90.2 TWh in 2008, 85.9 TWh in 2009 and 90.2 TWh in 2010, i.e. an increase of 4.9% between 2009 and 2010. Peak demand remained almost unchanged between 2009 and 2010. The table below provides an overview of the power demand and the peak capacity demand on the grids of the TSO and the DSOs during the period 2007-2010. Table 16: P ower demand and peak capacity demand in Belgium during the period 2007-2010

2007

2008

Installed capacity

Power station type

MW

%

Nuclear

5,926

37.5

CCGT and gas turbines

4,300

24.6

Conventional power stations including multi-fuel

2,355

2.6

Cogeneration

795

14.9

Incinerators

187

5.0

88

1.2

236

0.6

95

1.5

1,388

8.8

Onshore wind turbines

118

0.7

Offshore wind turbines

196

1.2

Biomass

117

0.7

15,802

100.0

Diesel engines Turbojets Hydro excluding pumped storage Pumped storage

2009

2010

Power demand122 (GWh)

90,109 90,202 85,946 90,200

Peak capacity demand (MW) on the grids of the TSO and the DSOs

14,040 13,524

14,139 14,200

Source: Synergrid – Electricity flows in Belgium (2010: provisional data)

5.1.2. Generation Installed capacity and generated power The composition of the Belgian generation park connected to Elia’s grid underwent a number of changes in 2010: 545 MW of generation capacity were decommissioned and 704 MW of additional generation capacity were brought into service. In addition to a series of new cogeneration units as well as the launch of the Knippegroen power station, capacity was increased at two nuclear units in Doel. In addition, Belwind brought into service 55 offshore wind turbines in the second half of 2010, each of which provides a capacity of 3 MW, bringing the total installed offshore capacity to 195.9 MW.

Total

Source: Elia

As regards the volumes of electricity generated, net electricity generation amounted to 85,800 GWh in 2010, compared with 84,724 GWh in 2009. The breakdown by type of primary energy of the electrical power generated from installations connected to Elia’s grid (including an estimate of auto-generated power used locally) is given in the table below. Table 18: Breakdown of power generated per type of primary energy

Power generated

Primary energy

MWh

%

45,723,502

53.3

25,816,355

30.1

5,350,522

6.2

65,180

0.1

Other auto-generated power autoconsumed 1

5,073,887

5.9

Hydro and pumped storage2

1,635,125

1.9

Nuclear

2

Natural gas

2

Coal2 Fuel

2

Other

2

Total1 1

2,135,430

2.5

85,800,000

100.0

Source: Synergrid, provisional data 2

Source: Elia, provisional data

122 Including estimated auto-generation consumed directly by charges connected to Elia’s grid, pumping and losses. As estimated auto-generation consumed directly by charges connected to the distribution networks is not available for 2010. For each year, the table provides the amount of power demanded excluding this non-injected auto-generation.

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Investment projects in the centralised generation park As at 31 December 2010, the investment projects and in generation units were as follows: • Planned projects (for which a permit or domain concession application is still under process): 2,502 MW (onshore only) • Project authorised, but for which construction has not yet begun: 4,567 MW, including 1,112 MW in offshore wind farms; • Projects under construction: 1,406 MW, including 460 MW in offshore wind farms. These projects are also mentioned in paragraph 3.2.10C of this report. Legal powers of authority and legislation development The CREG continues to play a significant role in the area of the security of supply. However, the CREG is not the only party to be involved in this issue, given the Belgian institutional context on the one hand and the distribution of powers of authority between the regulator and the energy administration on the other hand. While the regions have competence to settle “the regional aspects of energy”, the federal authority remains qualified to address “matters whose technical and economic indivisibility requires uniform implementation at national level” in the listed cases, i.e. the national plan for the equipment of the electricity sector, the nuclear fuel cycle, major storage infrastructures, the transmission and production of energy and the tariffs. In addition, the federal authority can settle everything that comes under the residual powers, which means that when a matter cannot be linked to one of the powers attributed to the regions, this matter comes under the federal scope of authority. And so in principle new energy sources fall in the regional scope of authority. However, the federal authority remains qualified in the North Sea and for the wind farms constructed in this zone in particular, owing to the limitation of the territorial powers of the regions to the territory of the region. The powers of the federal authority are assumed either at the level of the federal administration, which is the Directorate General for Energy, or at the level of the regulator, the CREG. The construction of new power generation facilities is subject to the prior granting of an individual permit issued by the Minister for Energy at the proposal of the CREG, which is responsible amongst other things for examining applications (see paragraph 3.2.1. above). Irrespective of the type of generation unit, the criteria for granting the permits basically stem from technical and financial considerations. From a technical perspective, it consists in checking whether the project for which a permit is requested will contribute towards fulfilling public service obligations and compliance

with the adopted guidelines concerning the choice of primary sources and the technology to promote. The project will also need to comply with a series of technical requirements and be environmentally friendly. The applicant will have to provide proof of the required technical capabilities with a view to the construction and operation of the generation unit, but also its dismantling. The applicant will also have to have sufficient economic and financial resources to successfully complete its project. All these criteria for the permit to be awarded are intended to enable the Minister for Energy to satisfy himself that the project is viable. Moreover, to date no prior permit or notification procedure is in place for decommissioning old generating units. However, there are many such units, and this is hampering the renewal of the generation park. Domain concessions with a view to the construction operation of power generation facilities using water, rents or wind in marine environments (wind farms) granted by the Minister for Energy after obtaining the nion of the CREG.

and curare opi-

As regards the long-term supply perspectives, the CREG is consulted in the context of the study on the outlook for electricity supplies, the so-called ‘prospective study’. The CREG also has the power to advise on the draft plan to develop the transmission system put forward by Elia. This development plan covers a period of ten years and is revised every four years. If the CREG finds that the investments planned here do not allow the TSO to meet the capacity requirements adequately and efficiently, the Minister for Energy can require the latter to adapt the plan. The CREG also has the power to approve the method used to assess the primary, secondary and tertiary reserve capacity, which contributes towards ensuring the security, reliability and efficiency of the grid in the control area. Similarly, it is entrusted with the task of approving the market operating rules intended to offset 15-minute imbalances. Finally, the Electricity Act provides for several support measures, with a focus on the promotion of renewable energies. For instance, the King has put in place a mechanism of green certificates for green energy generated by wind farms in the North Sea. Elia has to purchase these green certificates at a minimum price. The same obligations apply to Elia for green certificates issued by the regional authorities, although these cannot be exchanged for those issued at federal level. In addition, the act stipulates that Elia is to finance one-third of the cost of the submarine cable intended for the wind farms in the North Sea, with a maximum amount of € 25 million for a project involving 216 MW or more. This funding of € 25 million is reduced proportionally when the project involves less than 216 MW. The Act also provides for a support mechanism in favour of


69


holders of domain concessions, whose production gaps are greater given the uncertainties inherent to wind as a source of energy. Depending on the direction of the gap, Elia has to buy from or sell to these holders the proportion of energy corresponding to a percentage rate of the production gap. Finally, support measures are provided for in the event of the withdrawal of the domain concession for reasons other than negligence on the part of the concession holder.

5.1.3. Transmission grid infrastructures Investments a) Development plan The TSO has to draw up a new plan for the development of the electricity transmission grid in collaboration with the Directorate General for Energy and the Federal Planning Bureau. The draft development plan has to be submitted to the CREG for an opinion. This plan covers a ten-year period and has to be updated every four years. It contains a detailed estimate of the transmission capacity needs. In addition, the development plan defines the investment programme to be implemented by the TSO and takes into account the need for adequate reserve capacity and projects of common interest defined by the institutions of the European Union in the field of trans-European grids. In this context, the Management Board issued an opinion on Elia’s 2010-2012 draft development plan123. In its opinion, the Board draws attention to a number of shortcomings in the plan, including the fact that it fails to cover replacement investments and makes virtually no mention of the estimated investment cost or alternatives. Also it fails to contain a concrete and quantified roadmap to create an offshore grid, nor does it contain sufficient investments to jointly connect all the known projects for new generation facilities at the same time. b) Main investments in the transmission grid In 2010, RTE, the French TSO, and Elia installed the second 225 kV aerial three-phase circuit on an existing 15 km electrical line linking Moulaine (France) and Aubange (Belgium). Thanks to the use of a new type of electrical conductor, the capacity transmitted per three-phase circuit can be increased by more than 20%. This new type of conductor

123 Opinion (A)101014-CDC-994.

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was not only used for the new set of cables, but also for the existing one. According to Elia, this investment increases the exchange capacity between France and Belgium by 10% to 15%. In addition, a new underground 150 kV cable has been laid between the Blauwe Toren and Bruges substations as part of the measures to increase capacity between the coast and inland regions of the country. The main development of the transmission grid for the future is the Stevin project planned by Elia. This consists of extending the 380 kV grid between Zomergem and Zeebrugge. This grid reinforcement enables Elia to meet three needs: • it carries the power generated by the offshore wind farms to the interior of the country; • it creates the conditions for a new interconnection of the Belgian grid by a submarine link with the United Kingdom. This project is currently being studied. In the longer term, Elia is also considering expanding its interconnections via the North Sea to gain access to the sustainable (renewable) energy mix coming mainly from northern Europe; • thanks to this extension of the 380 kV grid towards the coast, it improves the security of the electricity supply in western Flanders and enables the continued economic development of the port of Zeebrugge and the surrounding area, which constitutes a strategically important growth centre. The timing of this project depends largely on the length of the various permit procedures needed for the construction of the project and the way they progress. These are scheduled to be completed by the end of 2012. The actual work could then start in early 2013 to be completed by the end of 2014. Grid security A substantial proportion of the physical energy flows comes from cross-border transits of electricity crossing the Belgian grid. According to Elia, physical transits accounted for approximately 8.0 TWh in 2010, an increase of 1.8 TWh compared with 2009. As in previous years, the trend in non-nominated flows varies with the seasons. In 2010, these flows tended to run from North to South between January and May and between October and December. During the summer period (June-September) the trend shifted from South to North. At their peak, these flows reached approximately 2,442 MW from North to South and approximately 2,059 MW from South to North.


Generally speaking, non-identified flows can now be limited by the phase-shifting transformers with which all the interconnections on the northern border have been equipped since the end of 2008. The peaks observed are usually due to the non-availability of a phase-shifting transformers or restrictions in the surrounding grids. For example, on 6 June 2010, the Zandvliet phase-shifting transformer was out of service as part of the “BRABO” project (development of the grid in the port of Antwerp). On that day, the non-nominated flows went from South to North, up to over 2,000 MW. These situations illustrate the fact that preventive solutions dealing with non-identified flows are increasingly complex and that the robustness of the grid is weakened in these cases. Certain possible incidents lead to potential problems which have not been encountered hitherto. The situations are constantly from one hour to the next and depend on a series of parameters that vary just as much: exchange programmes, non-identified flows linked among other things to wind-generated power, the generation park, etc. To cope with these situations, coordination with the neighbouring TSOs again appears to be essential. Only solutions that have been jointly examined and implemented make it possible to keep the grid security under control. Similarly, the modification of transmission capacities will have a real impact only if coordinated at international level (a BelgiumNetherlands modification has little impact if there is no Netherlands-Germany modification).

Coreso, the first regional technical coordination centre common to several TSOs was created on 19 December 2008 by the French and Belgian TSOs, RTE and Elia. Its activities, which got underway in Brussels in early 2009, will contribute to reinforcing the electricity security in Europe. The National Grid (UK) became a member of Coreso in mid-2009 and Terna (Italy) and 50 Hertz (northern and eastern Germany) became members in late 2010. The territory monitored by Coreso has therefore expanded considerably.

5.2. Gas 5.2.1. Demand In 2010, total natural gas consumption amounted to 215.3 TWh, i.e. a considerable rise (+ 10.9%) compared with consumption in 2009 (194.2 TWh). This increase is due entirely to a strong recovery in industrial demand for natural gas (+ 19.7%), which almost reached the level of consumption in 2008, and to a considerable increase in consumption on DSOs (+ 15.5%). The explanation for the peak in natural gas consumption among small consumers is due to the very harsh winter which was felt both at the beginning and at the end of 2010, resulting in a 22% increase in estimated heating requirements.

Table 19: Breakdown per sector of the Belgian demand for natural gas between 2001 and 2010 (in TWh)

Sectors

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2010/2009

Distribution

81.1

78.3

83.1

88.3

87.2

88.3

82.6

88.5

87.6

101.2

+ 15.5%

Industry (direct customers)

52.2

54.7

50.7

49.3

50.2

50.2

50.0

47.8

39.2

46.9

+ 19.7%

Electricity generation (centralised park)

37.5

40.9

51.1

49.7

52.5

51.9

56.7

54.6

67.3

67.1

- 0.3%

170.8

173.9

184.9

187.3

189.9

190.4

189.3

190.9

194.2

215.3

+ 10.9%

Total

Source: CREG


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Figure 30: D evelopment of the natural gas consumption per sector during the 1990-2010 period (1990 = 100), corrected for climate changes 460 440 420 400 380 360 340 320 300 280 260 240 220 200 180 160 140 120 100 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Household and 100 99 105 109 116 116 113 122 129 134 143 137 146 145 155 158 162 169 164 166 156 equivalent Industry 100 92 100 103 111 124 132 131 138 149 155 145 152 141 137 140 139 139 132 109 130 Electricity generation 100 118 122 127 133 161 171 180 240 295 271 255 278 348 338 357 353 386 372 458 457 total

100 99 105 109 116 125 129 134 148 162 165 156 166 171 172 177 178 186 179 182 186 Source: CREG

In 2010, it appears that the share of H-gas expressed as a percentage has slightly fallen to 73.6% (73.8% in 2009), the balance (26.4%) being covered by L-gas. This is due to the development of the market segments, as illustrated in

the graph below: a sharp rise in the distribution networks consumption (+ 15.5%) combined with the quasi-stable consumption of gas used for electricity generation (-0.3%).

Figure 31: Breakdown per sector of the Belgian demand for H-gas and L-gas in 2009 and 2010.

120 100

Offtake (TWh)

80 60 40 20 0

Total

H Public distribution

2009

72

2010


L

Total

H Industrial customers

L

Total

H

L

Electricity generation Source: CREG


Forecasts for natural gas demand in Belgium are shown in Figure 32. These are obtained by establishing the sum of the final demand in the household sector, the tertiary sector, the industry and the demand for natural gas for the generation of electricity. As such, these figures relate to trends that have been normalised for temperature.

Figure 32: Forecasts demand for natural gas in Belgium until 2020 (GWh, normalised t°, H+L) 300,000

250,000

GWh

200,000

150,000

100,000

50,000

0 2000 H+L

2001

2002 H

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

The forecasts are based on the “irrigation zones” for H-gas and L-gas as they were in 2008, and without any intervention as regards the conversion of L-gas customers to H-gas. According to the scenario planning, natural gas demand in Belgium will rise to 183,516 GWh in 2020 for H-gas and 59,659 GWh for L-gas. In the meantime, the forecasts show that demand in Belgium will reach 158,972 GWh for H-gas and 54,208 GWh for L-gas in 2013.

2015

2016

2017

2018

2019

2020 Source: CREG

L

According to the scenario planning, natural gas demand in Belgium will rise to 243.174 GWh in 2020. In the meantime, the forecasts show that demand for natural gas in Belgium will reach 213,180 GWh in 2013.

2014

5.2.2. Supply In 2010, a total of fourteen supply companies were operating on the Belgian market. Total natural gas consumption rose to 215.3 TWh, which represents an increase of 10.9% compared with consumption in 2009 (194.2 TWh). The GDF-SUEZ merger and the fulfilment of the conditions imposed by the European Commission further to the approval of the merger in 2008 had a profound impact on the development of the market in 2010 and in particular on the market shares of Distrigas and the GDF SUEZ group on the gas transmission market. With a 52.1% market share, Distrigas remained the dominant player in 2010.


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Figure 33: Market shares on the transmission grid in 2010 Vattenfall Energy Trading Netherlands N.V. 1% Statoil ASA 2% RWE Supply & Trading Netherlands B.V. 1% RWE Energy Belgium B.V.B.A. 1%

WINGAS GmbH & Co. KG 5%

SPE 9% Distrigas S.A. 52%

Lampiris S.A. 1% GDF Suez 18% Eneco Energy Trade B.V. 0% Électricité de France 1%

Specific European legislation for incident management is now in force and will have to be taken into account in the investment plans. This European Regulation No 994/2010124 includes a major modification in as much as specific standards are imposed both as regards the availability of natural gas and as regards the infrastructure. Reserve capacity

Electrabel S.A. 9%

E.On Ruhrgas AG 0%

E.On Energy Trading SE 0%

Source: CREG

5.2.3. Measures in emergency situations n

shorter period of time owing to the minimum delays for new nominations and renominations. This means that the TSO should make provision for incident resources for a minimum volume of 4,800 k.m³(n). In this respect, the TSO should ideally take into account an additional linepack (gas in pipeline) in its investments plan.

As of 2010, the entry capacity will be sufficient in accordance with the “n-1” precautionary principle. In 2012, the planned entry capacity will amount to 5,810 k.m³(n) whereas the total entry capacity for H-gas, including supplies to L/H conversion facilities) will amount to 4,067 k.m³(n)/h. The difference of 1,743 k.m³(n) /h is more than sufficient to deal with a shutdown of the most important entry point, the LNG terminal.

High-calorific natural gas market

Natural gas reserve Under the TSO’s investments plan, part of the creation of capacity of the rTr2/VTN2 pipeline (see paragraph 5.4.2. below) is taken over by the increase in the reserve linepack for the management of incidents from 1,150 k.m³(n) to 1,750 k.m³(n). The reserve linepack makes it possible to overcome the biggest fall in supply flows, for example a technical shutdown of 2 to 2.5 hours in extreme peak periods. This is a minimum period in which it is presumed that all the flexibility resources for the normal network balancing have already been used which means they are no longer available to be used for incident management. Outside peak periods, the transition period increases and part of the normal flexibility resources can be dedicated to incident management. From an incident management perspective it should ideally be made possible that an incident (starting from the worstcase scenario, that is the largest supply flow) is dealt with for a minimum of six hours to give the market a minimum amount of time to reorganise its own supply portfolios and deliveries. It is difficult for the market to be reorganised in a

It is recommended that the application of the infrastructure standards imposed by European Regulation 994/2010 should be clearly identifiable in the investment plan. n

Low-calorific natural gas market

Incident management on the natural L-gas market is problematic due to the fact that gas is supplied via a single route, the limited buffer possibilities in pipelines, the limited possibilities for the conversion of H-gas to L-gas by the injection of nitrogen, and the lack of L-gas storage facilities on the Belgian territory. A form of incident management is necessary however, given the size and nature of the Belgian L-gas market. The Brussels-Capital Region and the city of Antwerp are entirely dependent on L-gas for instance. It is recommended that a specific incident policy is developed for the L-gas market. Once again, the terms and procedures governing the use of L-gas underground storage capacity in France have to be examined more closely in consultation with all the stakeholders involved. The following table provides a general assessment of the existing resources in case of an emergency situation.

124 European Parliament and Council Regulation 994/2010 of 20 October 2010 concerning measures to safeguard security of the natural gas supply and repealing Council Directive 2004/67/EC (Official Journalof the European Union of 12 November 2010).

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Table 20: Existing tools in the event of an emergency situation

High-calorific natural gas market

Low-calorific natural gas market

Incident management Insufficient reserve capacity in accordance with the “n-1” principle until the end of 2011. As of 2012, sufficient reserve capacity. Reserve natural gas of the transmission grid operator insufficient to overcome a major incident for six hours. An alternative is to rely on assistance via transit / Zeebrugge hub. Need for an operational procedure and regulation for incident management.

Problematic because there is one route and one source. A technical incident on the import line during peak time immediately results in a crisis situation with the activation of a crisis plan: customer disconnection. Need for operational procedure for incidents management. Examination of the use of the L-gas storage site in France and imports from France. Source: CREG

n

New European regulation

A new European regulation deals with the issue of the security of supply125. This regulation, which entered into force on 2 December 2010, imposes specific standards for the availability of natural gas and infrastructures. As regards L-gas, a regional approach is needed for the proper application of the regulation. Cooperation with The Netherlands and possibly other countries consuming L-gas (France and Germany) will be necessary for an appropriate management of incidents.

5.2.4. Investment Storage capacity extension As part of the gradual extension of the underground storage capacity in Loenhout, the useful storage volume has been increased from 650 million of cubic metres of natural gas in 2009 to 675 million cubic metres in 2010. The last provisional phase will be undertaken in 2011, increasing the useful storage volume to 700 million cubic metres of natural gas. Use of the storage capacity has been made more flexible by increasing the emission capacity and the injection capacity. Reinforcement of Northern Limbourg In 2010, a major extension of the existing H-gas pipeline was undertaken from the Dilsen entry point to Lommel, in a territory mainly supplied by Dutch L-gas. This H-gas pipeline runs from Lommel to Tessenderlo via Ham. This connection will supply the new CCGT electric power station at the Tessenderlo Chemie site. In addition, it will enable customers to switch from L-gas to H-gas in the crossed region, first and foremost for industrial customers along the Albert canal. To continue to guarantee the security of supply, the pipeline from the Dilsen entry point has been reinforced locally.

rTr2/VTN2 The laying of the rTr2/VTN2 pipeline in parallel to the existing bi-directional rTr1/VTN1 pipeline along a stretch of almost 170 km between Eynatten and Opwijk is the main achievement of 2010. This pipeline has been laid in response to the market demand for over 10 billion cubic metres in additional capacity for cross-border transactions between the Eynatten, Zeebrugge and Zelzate interconnections. This gives a further boost to access to the Zeebrugge hub and it will be possible to supply the Belgian market more easily from the East. In this respect, it has also been made possible since 1 October 2010 to physically export as well as to import natural gas via the existing interconnection with The Netherlands at Zelzate. This is a major achievement for the security of supply. Moreover, it is entirely in line with European Regulation N° 994/2010 which entered into force in December 2010 with a view to establishing bi-directional interconnections by 2 December 2013. These achievements are fully in line with the plan aimed at making Belgium the crossroads for natural gas in NorthWestern Europe. Reinforcement of North/South axis The North/South project is the result of a market consultation coordinated by Fluxys and the French TSO, GRTgaz, held over the 2007-2008 time frame under the supervision of the CREG and and the French regulator (CRE) supervision. This Open Season gauged market interest for new transmission capacities from border to border crossing Belgium towards France. In this context, fourteen grid users concluded contracts of at least ten years with Fluxys for new capacities from Zeebrugge, Fouron-le-Comte or Eynatten, towards Blaregnies. The new capacities cover a total of 10 billion cubic metres per year. The additional compression capacity needed for this North/South project is planned in Winksele and Berneau.

125 Regulation (EU) 994/2010, cf. note 124. CREG Annual report 2010

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The additional compression in Berneau is planned by the end of 2011 and will make it possible to carry additional natural gas flows from The Netherlands to Blaregnies.

5.2.5. Security of supply standards

The additional compression in Winksele on the rTr/VTN pipeline is planned by the end of 2012 and amongst other things will, make it possible to move from three balancing zones to a single national balancing point for the H-gas market. It may be necessary to lay a new pipeline of approximately 125 km between Winksele and Blaregnies, but possible rearrangements in the grid users’ border to border contracts portfolio could make the decision on the new pipeline pointless by the end of 2013.

In the past, on repeated occasions the CREG has expressed its concerns over the limited supply of flexibility services for storage in general and the lack of short-term storage services in particular. In order to fulfil its undertakings in this respect, the TSO drew up a proposal for short-term services based on the virtual storage concept. The CREG asked Fluxys to slightly adapt the proposed allocation rules so that they more effectively meet the needs of grid users with limited market share and those of potential new entrants on the market. The new virtual storage concept, with the exception of details of the allocation rules, was explained to grid users (active and non-active) at a shippers meeting held on 8 May 2009. The process of optimising the allocation rules continued under the working group consultation between representatives from the CREG and Fluxys. The initial entitlement to which virtual storage user can lay claim is calculated on the basis of MTSR rights on the H-gas grid that the user has subscribed. The formula used to calculate the allocated entitlement takes into account the CREG’s concern to facilitate access to the network for new and small actors. The virtual storage service was included in the 2010-2011 indicative programme for storage services.

Open Season on transmission capacity from France to Belgium The first non-binding phase of a market consultation process that gauges the market’s interest in the transmission capacity from France to Belgium was completed in 2010. This consultation was launched further to the possible construction of an LNG terminal in Dunkirk intended mainly for international trade in Zeebrugge and the Belgian market. This market consultation revealed sufficient interest for a new pipeline to be laid from Dunkirk to Zeebrugge by means of a new interconnection point in the Furnes region. However, the binding phase will not begin until the initiator, EDF, decides whether to build a new LNG terminal in Dunkirk. As at 31 December 2010, after numerous postponements, a decision was still awaited. The new connection could result in an increased liquidity on the market by coupling the Zeebrugge hub with the French PEG Nord spot market, not to mention the synergies with the Zeebrugge LNG terminal. The CREG conducted a study into this project (Study (F)100211-CREG-945). Open Season on transmission capacity to the Grand Duchy of Luxembourg In the second quarter of 2009, Fluxys launched an Open Season for capacity between Belgium and the Grand Duchy of Luxembourg. This Open Season closed at the end of February 2010 and resulted in a sum of binding requests amounting to a total of 172,000m³/h for the 2015-2025 time frame. The capacities reserved as of 2015 are in line with expectations and will give rise to limited investments. A problem with the allocation of capacity intended for the Grand Duchy of Luxembourg occurred for the 2010-2015 time period. Following the involvement of the CREG in this case, discussions were held between the shippers concerned and the capacity allocation problem was resolved on a negotiated basis between the shippers.

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Virtual storage service

Dudzele peak shaving plant The Dudzele peak shaving facility interrupted its activities on 1 July 2010 owing to the unduly low interest from the market, even in the medium term. The facility offered a peak storage capacity of 59 million cubic metres of natural gas and enabled the market to subscribe to an emission capacity of 360 m³(n)/h. There are obviously sufficient interesting alternatives for the market to purchase flexibility or make use of peak storage capacity abroad. LNG terminal In 2010, seven Q-Flex LNG tankers were unloaded in Zeebrugge and truck loading contracts were concluded. Moreover, Fluxys LNG loaded small LNG tankers. The shiploading and truck-loading services which were hitherto relatively underdeveloped are now starting to expand.

6. The CREG


77

6. The CREG

6.1. The assignments of the CREG

6.2. The Bodies of the CREG

In a preliminary ruling (ruling No 130/2010 of 18 November 2010), the Constitutional Court declared that it is compatible with the Constitution to attribute to the CREG, which is not managed directly by the executive power, prerogatives of administrative authority such as monitoring the accounts of companies in the electricity sector or issuing administrative fines. More specifically, the Court decided that the lack of hierarchical control or administrative supervision over the CREG is not contrary to the Constitution in that the CREG is an administrative authority which, while having a significant degree of autonomy, is nevertheless subject to monitoring both by the courts of law (Council of State/judicial courts) and by Parliament (its budget requires approval, its assignment and method of operation are defined by law, its annual report is passed on to the legislator and the competent minister has parliamentary responsibility). The Court added that the fact that the CREG fulfils its assignments with a high level of autonomy results from the requirements of European Union law, which has gradually become more explicit in this area.

6.2.1. The General Council

Moreover, over the course of the year 2010, the chairman, the directors and sixteen members of staff at the CREG were appointed inspectors vested with the powers of authority of officers of the judicial police.126. They have been entrusted with the task of seeking out and establishing, across Belgium as a whole, infringements of certain provisions of the Gas and Electricity Acts, as well as the implementing decrees of these Acts. The individuals in question took an oath before the Minister for Justice and will work under the supervision of the public prosecutor attached to the Court of Appeal in Brussels. Finally, with a view to the expiry of the period allowed for the transposition of the third energy package on 3 March 2011, the Management Board presented two studies on the legislative amendments required to implement the reinforcement of its powers. For a more in-depth discussion of these studies, please refer to paragraph 2.7 of this report.

Isabelle Callens, Marc Leemans, Chairman Vice-Chairman In 2010, the chairmanship of the General Council was assumed by Ms Isabelle Callens and the vice-chairmanship by Mr Marc Leemans. The General Council met eight times in 2010. An extraordinary meeting was dedicated to the presentation of study 986 on the amendments to be made to the Electricity Act in November (cf. paragraph 2.7 of this report). The General Council unanimously approved the CREG draft budget for 2011at its plenary meeting on 27 October 2010. Thanks to the permanent presence of a representative of the Minister for Energy, the work of the General Council was able to focus on the most pressing aspects and periodic updates were provided of the government’s concerns regarding gas and electricity. The many current issues broached by members made it possible to keep the Minister for Energy informed of the concerns of the General Council. The General Council was also informed of the positions adopted by the Management Board during hearings in the Chamber of Representatives or at press conferences. In 2010, the General Council put forward five opinions, all of which are available to be consulted at the CREG website. Various studies undertaken by the Management Board as well as questions asked by the Minister for Energy were prepared and discussed in various working groups before being submitted to the General Council. 1. Opinion 45 on Management Board study 945 concerning the possible connection between the LNG terminal in Dunkerque and the Belgian natural gas transmission system (‘functioning of the gas market’ working group). In this opinion, the General Council upholds the conclusions reached by the Management Board (cf. paragraph 5.2.4 of this report) and also considers that:

126 Royal Decree of 25 June 2010 appointing members of the Management Board and members of staff of the Commission for Electricity and Gas Regulation as officers of the judicial police (Belgian Official Journalof 23 July 2010).

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6. The CREG

a) there is a need to keep an eye on healthy competition between the Zeebrugge terminal and the future Dunkerque terminal, particularly if the latter were to be entirely released from regulated access rules; b) the two terminals allow major synergies to be achieved by increasing the flexibility of the grid and diversifying sources of supply; c) an international market study (Open Season), organised jointly by Fluxys, GRTgaz (natural gas TSO in France), the CRE (French energy regulator) and the CREG, offers the best guarantees for an appropriate decision; d) the new cross-border connection may not, under any circumstances, be a direct pipeline and must be connected to the interconnected grid in France and in Belgium; e) the connection gives rise to a physical bi-directional interconnection between the connected networks, provided that this has socio-economic advantages for grid users; to do so an initial, inevitable condition will be to work out a solution with regard to odorisation and pressure requirements so that natural gas can actually run from France to Belgium; f) the connection must be covered by the regulated system, both as regards access to the grid and tariffs; g) the new connection must contribute towards efficient development in terms of costs and the operational management of the transmission system; therefore, the impact of the connection on existing activities (swapping or netting, backhaul) must be analysed. In this opinion, the General Council also calls upon the French and Belgian governments and regulators to follow these recommendations as closely as possible when approving and authorising the connection between the French and Belgian natural gas transmission system. 2. Opinion 46 on Management Board study 929 concerning the possible impact of the electric car on the Belgium electricity system (ad hoc working group). The ad hoc working group decided from the very beginning not to analyse the Management Board study in detail (see paragraph 3.2.2 of this report), but to make a summary of the general vision on the issues. In this opinion, the General Council asks the Management Board to continue to reflect on the matter of the operation of the Belgian market in light of the possible large-scale introduction of electric vehicles in Belgium and stresses the importance of links between the use of electric vehicles, the networks and the generation of electricity. Moreover, electric vehicles could facilitate the integration of renewable energy sources.

The General Council’s opinion does not in any way overcome the need for wider reflection in society on the issue of mobility and intermodality in general and the importance of the electric vehicle compared with other alternatives (hydrogen, etc.), so as to make the most of the opportunities provided by electric mobility. The General Council calls for the development of a vision for Belgium and for Europe as a whole. 3. Opinion 47 on Management Board study 944 concerning the initial estimate of the cost of the measures referred to in Article 7 of the law of 29 April 1999 on the organisation of the electricity market (‘renewable energies’ working group). At its meeting on 20 January 2010, the General Council asked the Management Board to conduct a study into the total cost of the support provided for offshore wind farm producers in Belgian waters. In its study (F)100128-CDC-944, the Management Board provided an initial response to this matter (cf. paragraph 3.2.1.C.c of this report). The General Council recalled that it had already issued an opinion in May 2009 on the draft directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources. This Opinion 43 is available on the CREG website. In Opinion 47, the General Council makes numerous recommendations, relating in particular to: the selection of the optimal mix of renewable energy sources to reach the targets, taking into account all the social costs and benefits; the optimisation of support mechanisms once the optimal mix of renewable energy sources has been determined; the limitation of support measures to the additional cost compared with the market value of energy produced using renewable sources; the cost of green certificates, the cable and production deviation; and the revenue for the payment of the support mechanism. 4. Opinion 48 on Management Board study 947 concerning the Belgian short-term electricity market Belpex and the use of capacity at the interconnections with France and The Netherlands in 2009 (cf. paragraph 3.2.2 of this report) (‘functioning of the electricity market’ working group). In this opinion, the General Council: a) notes that the market players have relatively positive experiences with the price mechanism on Belpex and with the coupling of the trilateral market. The market coupling has certainly contributed towards greater convergence on the Dutch, French and Belgian electricity markets. However, it can only lead to full market integration provided that congestion on the market can be limited so that it no longer (or virtually any longer) has an impact on the formation of market prices. The General Council is calling on the regulators, TSOs and exchanges to seek out solutions together that could lead to full market integration;


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b) notes that price peaks have occurred again and asks the regulators and, if necessary, the competition authorities in the countries concerned to analyse these events in depth and if necessary take steps to prevent such price peaks; c) as regards market shares, the General Council notes that the level of concentration on Belpex has decreased gradually over the past few years. Nevertheless, concentration certainly remains high on the buyer’s side, and this worries the General Council, which therefore requests rigorous monitoring by the regulators; d) notes that the market players also have a relatively positive experience with the allocation mechanisms at the borders. In order to achieve even better results, the General Council is inviting all the TSOs in the CWE region (Central West European region), with regard to their own networks and cross-border capacities, to: - use the existing capacities even better; in addition to the security of supply, system operators should see better market functioning as one of their priority objectives; - find the most balanced distribution possible of long/ short-term capacities depending on the market needs; - invest quickly if necessary, in additional capacity to reduce congestion, speed up price convergence and hence facilitate market integration, as is the case with the ‘Moulaine-Aubange’ line; e) wishes to have a clearer view of the exact destination of congestion rents by the various TSOs concerned; f) also hopes that it will be possible to extend the coupling between Belgium, The Netherlands and France to Germany very quickly. In this opinion, the General Council also invites the Management Board to continue to monitor the operation of the Day-Ahead and the Intraday market in Belgium, the coupling of these markets with neighbouring markets and the use of capacity on the interconnections in conjunction with the other transmission system operators and regulators concerned. 5. O pinion 49 on Management Board study 874 concerning natural gas supply needs, security of supply and infrastructure development 2009-2020 (‘functioning of the gas market’ working group). In addition to the affordability of electricity and natural gas for end consumers, the General Council remains very concerned about the security of supply. While an opinion on the security of supply for electricity was issued in 2009 (this opinion 42 is available on the CREG website), no similar opinion had so far been put forward with regard to natural gas supplies. This is why the General Council wished to put forward the following recommendations about the security of natural gas supply,

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given a fortiori the importance of natural gas in the fuel mix of the country, including for the generation of electricity. a) The General Council feels that it is important to undertake a long-term analysis of needs in terms of natural gas and infrastructure for natural gas for the Belgian market on a regular basis. This is the best way to ensure that the necessary resources are assigned in time so as to provide additional volumes and infrastructure. The General Council therefore calls upon the competent authorities to draw up the prospective study on the security of natural gas supply as quickly as possible (the last indicative plan dates from 2004). b) In the meantime, the General Council refers to the analysis and recommendations made in CREG study 874 on natural gas supply requirements, security of supply and infrastructure development 2009-2020 (this study is available on the CREG website); c) The General Council notes that to date, on the liberalised market, no specific standards have been imposed in Belgian legislation as regards security of natural gas supply. It therefore insists on the fact that the existing situation should be compared with the requirements. It also stresses that future European regulation on the security of natural gas supply will impose binding standards in terms of natural gas infrastructure and supply. This regulation will be directly applicable in the Belgian legal system; d) Concerned, among other things, about finding a balance between the infrastructure needed to ensure maximum security of supply on the one hand and the competitiveness of natural gas as an energy vector on the other, the General Council asks to be involved in the interpretation of this regulation in Belgium; e) As regards the high-calorific gas market, the General Council does not question the investments planned by Fluxys, but does make comments about the feasibility of the timing of these projects. For instance, refraining from issuing permits can cause delays and hence hamper access to the market and threaten the security of supply. The General Council therefore stresses the need for a permits policy based on the general interest and on the efficient monitoring of the rate at which projects underway are implemented; f) Low-calorific natural gas has played a major role in promoting the use of natural gas in Belgium and still makes a substantial contribution to final consumers in Belgium in terms of the flexibility of natural gas supplies. However, the General Council is concerned about the availability of the required level of long-term firm exit capacity at Hilvarenbeek, as specified in Management Board study 936 (this study dating from January 2010 is available on the CREG website). In this context, it insists on a coordinated cross-border approach between the countries concerned. In addition, the General Council stresses that, despite the recent developments in

6. The CREG

the Dutch market model which have prompted a number of new L-gas suppliers to enter the Belgian market, competition on the low-calorific natural gas market is still more limited than that on the high-calorific natural gas market at the moment.

The General Council is aware of the fact that the accessibility and appeal of the Belgian market with a view to bringing in flows of natural gas (both for import and for export) are key elements in the security of supply, as well as the control over demand for energy. It is therefore asking the system operator, the authorities and the regulator to pay particular attention to these issues and, by working out an adequate investment and regulation policy, to continue the development of Belgium in its role as a hub for natural gas in Europe.

Table 21: Members of the General Council as at 31 December 2010127

Federal government

Regional governments Representative employees’ organisations sitting on the National Labour Council

Representative employees’ organisations sitting on the Council for Consumption Organisations for the promotion and protection of the general interests of small-scale users Representative organisations of industry, and the banking and insurance sector sitting on the Central Economic Council Representative organisations of the crafts, small and medium-sized trading companies and small-scale industry sitting on the Central Economic Council Major electricity consumers Major natural gas consumers Producers who are members of FEBEG (the Belgian Federation of Electricity and Gas Enterprises) Electricity producers renewable energy sources Electricity producers cogeneration Industries that generate electricity for their own needs Distribution system operators - INTERMIXT

- INTER-REGIES TSO for electricity TSO for natural gas Holders of a supply permit for natural gas who are members of FEBEG Environmental associations Holders of a supply permit for electricity who are members of FEBEG Market operator for the exchange of energy blocks proposed by BELPEX Chairman of the CREG Management Board

Actual members DUJARDIN Davine ANNANE Jihanne CHAHID Ridouane ROOBROUCK Nele DE COSTER Nicolas BIESEMAN Wilfried AUTRIQUE Henri JACQUET Annabelle LEEMANS Marc VERHUE Maureen PANNEELS Anne VERCAMST Jan WILLEMS Tom VAN DAELE Daniel ADRIAENSSENS Claude DOCHY Stéphane CALLENS Isabelle CHAPUT Isabelle VAN der MAREN Olivier ERNOTTE Pascal VANDEN ABEELE Piet

Deputy members DEWISPELAERE Sophie NIKOLIC Diana HOUTMAN Eric BOEYKENS Marc ONCLINX Philippe TANGHE Martine BOHET Maurice DECROP Jehan VAN MOL Christiaan SKA Marie-Hélène DE MOL Philippe BAECKELANDT Filip JONCKHEERE Caroline STORME Sébastien SPIESSENS Eric RENSON Marie-Christine DE BIE Nico VANDERMARLIERE Frank CALOZET Michel AERTS Kristin WERTH Francine VAN GORP Michel

CLAES Peter BRAET Luc HERREMANS Jan MAERTENS Paul LAUMONT Noémie STEVENS Tine BÉCRET Jean-Pierre

EELENS Claire de MUNCK Laurent DE GROOF Christiaan de VILLENFAGNE Aude BODE Bart MARENNE Yves ZADORA Peter

HUGE Jacques HUJOEL Luc PEETERS Guy

DECLERCQ Christine DEBATISSE Jennifer VERSCHELDE Martin

DE BLOCK Gert

HOUGARDY Carine

FONCK Pascale TUMMERS Paul GILLIS Michaël VAN NUNEN Carlos VAN DYCK Sara VANDE PUTTE Jan HEYVAERT Griet VAN BOXELAER Kathleen VANDENBORRE Catherine

GERKENS Isabelle DESCHUYTENEER Thierry VAN GIJSEL Gert DE BUCK Hilde TURF Jan VANDEBURIE Julien GODTS Annemie WYVERKENS Herman LOOS Rob

POSSEMIERS François Source: CREG

127 The list of members of the General Council was modified three times in 2010 by Ministerial Decree of 1 March (Belgian Official Journalof 19 March 2010), 30 March (Belgian official journal of 7 April 2010) and 7 June (Belgian Official Journalof 22 June 2010). CREG Annual report 2010

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6. The CREG

6.2.2. The Management Board

François Possemiers, Chairman

Guido Camps, Director

The Management Board is responsible for the operational management of the CREG and undertakes everything that is necessary or useful for the fulfilment of the assignments entrusted to it by the Electricity Act and the Gas Act. The chairman and the three directors who make up the Management Board deliberate as a college in accordance with the usual rules on deliberating meetings. The Management Board is chaired by Mr François POSSEMIERS, who is also responsible for the management

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Bernard Lacrosse, Director

Dominique Woitrin, Director

of the CREG. The three directors are Mr Guido CAMPS, who is in charge of prices and accounts monitoring, Mr Bernard LACROSSE, who heads the administrative directorate and Mr Dominique WOITRIN, who is in charge of the technical operation of the electricity and natural gas markets. The members of the Management Board were appointed by Royal Decree on 15 January 2007 for a six-year term of office.

6. The CREG

Table 22: Directorates and staff of the CREG as at 31 December 2010

Chairmanship of the Management Board

POSSEMIERS François DEVACHT Christiane FIERS Jan JACQUET Laurent LOCQUET Koen ROMBAUTS Josiane Directorate for the technical operation of the markets WOITRIN Dominique GOOVAERTS Wendy VAN KELECOM Inge GHEURY Jacques MARIEN Alain MEES Emmeric VAN ISTERDAEL Ivo CLAUWAERT Geert CUIJPERS Christian DE WAELE Bart FONTAINE Christian PONCELET Yves VAN HAUWERMEIREN Geert FILS Jean-François LUICKX Patrick TIREZ Andreas Directorate for price and accounts monitoring CAMPS Guido FELIX Kim de RUETTE Patrick LAERMANS Jan WILBERZ Eric ALLONSIUS Johan CORNELIS Natalie DEBRIGODE Patricia DUBOIS Frédéric JOOS Benedict MAES Tom BARZEELE Elke COBUT Christine DE MEYERE Francis HERNOT Kurt KUEN Nicolas LIBERT Brice PHILIPPE Quentin PIECK An BROODS David MARTIN Sabine Administrative directorate LACROSSE Bernard SELLESLAGH Arlette General Council DE LEEUW Han HERREZEEL Marianne General administration DE PEUTER Caroline ESSER Mercédès HAESENDONCK Herman VAN ZANDYCKE Benjamin LOI Sofia CEUPPENS Chris DE DONCKER Nadine VAN MAELE Nele WYNS Evelyne JUNCO Daniel IT department LAGNEAU Vincent GORTS-HORLAY Pierre-Emmanuel Finance SCIMAR Paul LECOCQ Nathalie PINZAN Laurent Studies, documentation and archives BOUCQUEY Pascal CHICHAH Chorok DETAND Maria-Isabella HEREMANS Barbara PARTSCH Gwendoline ROOBROUCK Myriam SMEDTS Hilde STEELANDT Laurence ZEGERS Laetitia GODDERIS Philip HENGESCH Luc

Chairman of the Management Board Assistant to the director Secretary of the Management Board Chief advisers Director Assistant to the director Multi-purpose secretary

Chief advisers

Senior advisers Advisers Director Assistant to the director Chief advisers

Senior advisers

Advisers Assistant advisers Director Assistant to the director Advisers Office Manager Translators Coordinator

Multi-purpose office staff Logistics staff member IT specialist Assistant IT specialist Head of Finance Accountant Administrative staff member

Senior advisers Adviser Archivist CREG Annual report 2010

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6.3. General policy plan and comparative report on the objectives and achievements of the CREG

6.4. Cooperation with other bodies

As stipulated in the Electricity Act, the Management Board prepared the general policy plan128 setting out the objectives which the CREG aims to achieve in 2011. This plan accompanies the draft budget of the CREG and was handed to the Minister for Energy on 29 October 2010 for submission to the Council of Ministers.

As in previous years, in 2010 the CREG again drew up the “National Report from Belgium to the European Commission”, working closely with the three regional regulators and the Directorate General for Energy at the Federal Public Service Economy. This report enables the European Commission to draw up its annual report on the progress made with the creation of an internal electricity and natural gas market. The report provides an overview of the Belgian electricity and gas markets during 2009 and hence gives a view of the implementation of European legislation in Belgium. Major developments and striking facts in the period under review included the adoption of the third European legislative package on the internal market for electricity and natural gas, after two years of debate at European level. The year 2009 was also marked by several major acquisitions, including that of supplier Distrigas by Italian company Eni S.p.A. or that of the majority of the shares in SPE (via Segebel) by EDF, as well as by the consequences of previous mergers, such as that of SUEZ and Gaz de France. A new Belgian Act was also approved in 2009 which, amongst other things, forced the GDF SUEZ group to reduce its stake in Fluxys to a maximum of 24.99 % by 31 December 2009 (cf. paragraph 4.1.3 of this report).

The structure of the general policy plan for 2011 has been altered compared with that used for the general policy plan for 2010. With the adoption of the third European energy package and its transposition into Belgian law, scheduled for 3 March 2011 at the latest, new duties are entrusted to the regulatory authorities. The new structure now distinguishes between the CREG objectives to be attained as part of the so-called ‘Business as usual’ scenario and the objectives pursued further to the new duties entrusted to the national regulator by the third package. The first part of the general policy plan deals with the context and the latest developments as regards the electricity and the gas markets, both in Belgium and in Europe. In the second part the policy plan sets out in detail the 21 objectives that the CREG has set itself for 2011 and which are included in concise form in the third part. The Electricity Act also stipulates that every year a comparison should be made between the objectives as put forward in the general policy plan and the extent to which they are achieved. The Management Board drew up this comparative report for the year 2009129 and handed it to the Minister for Energy on 30 April 2010 for submission to the Council of Ministers. In its general policy plan for 2009 the CREG had identified 16 general objectives to be achieved. These objectives were divided into 97 actions that corresponded to the individual assignments to be accomplished. In its comparative report for 2009 the CREG noted, however, that it had undertaken a total of 113 actions in the context of the objectives initially set out. This increase of over 16 % in the number of actions undertaken is the result either of requests for studies, opinions and proposals from the Minister for Energy made over the course of 2009 or of initiatives taken by the CREG to improve the operation of the electricity and the gas markets. Of the 113 actions taken by the CREG in 2009, 58 actions were fully implemented, 8 yielded a better result than hoped, 20 were largely completed by the CREG but could not be finalised owing to external elements, 7 were largely completed, 6 were undertaken to a limited extent, 5 could not be implemented and 9 no longer serve any purpose.

128 Plan (Z)101028-CDC-1003 129 Report (Z)100430-CDC-967.

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6.4.1. The CREG and the European Commission

In addition, the CREG cooperated on numerous other consultation processes and reports on behalf of the European Commission via its membership of CEER and ERGEG (cf. paragraph 6.4.6. below).

6.4.2. The CREG and ACER Regulation (EC) 713/2009 of the European Parliament and of the Council of 13 July 2009, published in the Official Journalon 14 August 2009, establishes an Agency for the Cooperation of Energy Regulators, known as ACER. The assignment of ACER is to coordinate the work of the national regulatory authorities at European level and its duties include the following: • participating in drafting European network codes; • deciding on the terms and conditions for access to and operational security applicable to cross-border infrastructures; • adopting individual decisions in specific areas; • issuing opinions in a series of issues (on the draft statute of ENTSO-E and ENTSO-G (European Network of TSOs for Electricity/Gas), on the ten-year network development plans, etc); • monitoring the internal electricity and natural gas markets in cooperation with the European Commission,

6. The CREG

the member states and the competent national authorities and informing the European Parliament, the European Commission and the national authorities of its conclusions; • informing the European Commission when it notes that a national regulatory authority is not complying with certain provisions of the third energy package; • s upervising regional cooperation between TSOs. ACER was scheduled to be fully operational by 3 March 2011. Initially, CEER will continue to carry out the preparatory work of ACER until the latter is fully operational and has its full staff complement. As soon as ACER is operational, ERGEG (cf. paragraph 6.4.6 below) will cease to exist. ACER will comprise an Administrative Board, a Board of Regulators (within which the regulatory authorities of the member states (including the CREG) are represented), a Director, his staff and a Board of Appeal. The Administrative Board met for the first time at the end of March. The first meeting of the Board of Regulators took place on 4 and 5 May 2010 when the internal rules of procedure established by CEER within the “Agency Project Team Task Force” were approved and used as a basis for the election of the chairman and vice-chairman of the Board of Regulators. There was a consensus among the national regulatory authorities to maintain an alignment, in the interests of continuity, between the general assembly of CEER and the ACER board of regulators, such that Lord John Mogg (Ofggem) was elected chairman and Walter Boltz (e-control) vice-chairman of the Board of Regulators. Mr Alberto Pototschnig was appointed as ACER director on 6 May 2010 by the Administrative Board after obtaining the opinion of the Board of Regulators. As soon as he took up his post, the recruitment of staff got underway. The procedure for appointing the members of the Board of Appeal had not yet been completed by 31 December 2010. The head office of ACER is in Ljublijana, Slovenia. However, its activities were provisionally undertaken in Brussels in 2010, while awaiting the move to the official head office in February 2011. The Agency’s working programme for 2011 was prepared by the national regulatory authorities (following prior approval by the Board of Regulators) and approved by the Administrative Board on 23 September 2010130. The emphasis will be placed on drafting framework guidelines, issuing opinions on the draft statute, the list of members and draft rules of

procedure of the ENTSOs, issuing opinions on the conformity with the framework guidelines of the network codes drawn up by the ENTSOs, adopting decisions on crossborder congestion and exemptions from third-party access to the network. In addition, the Agency will undertake the monitoring missions with which it has been entrusted as quickly as possible. In an initial phase, the Agency will set up three working groups: an electricity working group, a gas working group and a working group responsible for regional coordination.

6.4.3. The Madrid Forum The European Gas Regulatory Forum, also known as the Madrid Forum, serves as a platform for consultation on the development of the internal natural gas market. Its participants include the European Commission, the member states and the European regulators. The 17th and 18th meetings of the Forum were held on 14 and 15 January and 27 and 28 September131. Since the publication in 2009 of the third European energy package (cf. 2009 Annual Report, paragraph 1.2, p. 7), this Forum has drawn up a statement of the situation of activities relating to the natural gas market with a view to facilitating implementation of the new European framework to be transposed into national law by 3 March 2011. The pilot projects for the development of the Framework Guidelines, which the regulators have to draw up, as well as the network codes, which the TSOs have to establish, were the main subjects discussed in the Forum in 2010. Particular attention was paid to pilot framework guidelines projects relating to the allocation of capacity, balancing and tariff harmonisation. As regards drawing up framework guidelines on capacity allocation, the Forum welcomed the work done by ERGEG (cf. paragraph 6.4.6 below), which resulted in a final proposal submitted by the regulators to the European Commission at the end of 2010. Among the items placed on the Forum agenda by the European Commission were also measures designed to ensure the security of the natural gas supply in the future. This resulted in the publication of Regulation (EU) No 994/2010 of 20 October 2010 concerning measures to safeguard security of the gas supply and repealing Council Directive 2004/67/EC (see paragraph 2.5.A of this report). The launch of a new comitology process relating to the principles of congestion management (implementing European Parliament and Council Regulation (EC) No 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005)

130 http://www.energy-regulator.eu/portal/page/portal/ACER_HOME/The_Agency/Work_programme/ACER%20Work%20Programme%202011.pdf. 131 The conclusions reached by the Forum and all related documents are available on the European Commission website: www.ec.europa.eu/energy/gas_electricity/forum_gas_madrid_en.htm. CREG Annual report 2010

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was also dealt with. Moreover, particular attention was paid to the issue of investment. In this context, the European Commission published an “Energy Infrastructure Package” to enable better identification and support projects of European interest.

6.4.4. The Florence Forum The European Electricity Regulatory Forum, also known as the Florence Forum, is a platform for consultation on the development of an internal electricity market whose participants include the European Commission, the member states and the European regulators. The 18th and 19th meetings of the Forum were held on 10 and 11 June and on 13 and 14 December 2010132. The following items were discussed at both meetings: the internal electricity market, specifically including the work concerning the Framework Guidelines included in the third European energy package, market integrity and transparency, the development of transmission infrastructures and regional initiatives. The final meeting dealt with the implementation of the European Agency for the cooperation of energy regulators (paragraph 6.4.2 above) and its work programme. As regards drawing up the framework guidelines, at its last meeting the Forum welcomed the work of ERGEG (paragraph 6.4.6 below) concerning the framework guidelines on connection to the network and those on capacity allocation and congestion management. The Forum stressed the importance of the work performed in the field of capacity allocation and congestion management for the creation of a robust framework for market coupling based on price. The Forum particulary stressed the importance of clearly specifying the target model for the Intraday mechanism for the allocation of transmission capacity in the framework guidelines on capacity allocation and congestion management. The Forum also welcomed the good coupling results based on volumes recently put in place between the Central West Europe region (CWE) and the Scandinavian region and agreed that establishing coupling based on price in northwestern Europe (CWE, Scandinavia and United Kingdom) scheduled for 2012 is the first stage in putting in place pricebased coupling that would extend across Europe. As regards the development of transmission infrastructure, the Forum underlined the key role of the regulators and TSOs in putting in place a new pan-European instrument for energy security and infrastructure. In particular, the Forum encouraged the proposal relating to the establishment of a

platform dedicated to electricity highways, which would be run by the European Commission in conjunction with ENTSO-E (European Network of TSOs for Electricity) and the regulators. With regard to regional initiatives, the Forum recalled their key role in putting in place the internal electricity market.

6.4.5. The London Forum The CREG took part in the third Citizens’ Energy Forum, also known as the London Forum, on 21 and 22 October 2010133. The particular feature of this Forum, organised by the European Commission together with CEER, as compared with those in Florence (paragraph 6.4.4 above) or Madrid (paragraph 6.4.3 above) is that it is intended to enable consumers and their organisations to participate in an active way in the debates. The European Commission is represented by DG ENER (Energy) and DG SANCO (Health and Consumers). The regulatory authorities and public authorities from the member states were also in attendance. The sector was represented amongst others by Eurelectric, Eurogas, Geode and CEDEC. It is also worth noting the presence of independent and autonomous ombudsmen and sector-based complaints services. The Forum welcomed the conclusions of the Informal Energy Council which met on 6 and 7 September 2010, with consumer protection as one of the main issues, and during which the Belgian presidency examined, at ministerial level, the growing phenomenon of energy poverty, proposed to increase the importance of the London Forum and approved the European Commission proposal to prepare a report aimed at establishing: • a network of energy ombudsmen with competence for matters of consumer protection; • a list of existing and future European practices likely to contribute directly or indirectly to consumers’ interests; • a framework definition of vulnerable customers. The following four main topics were discussed at the 2010 London Forum: • the complaint handling procedure, through the approval of the “Guidelines of Good Practice on Customer Complaint Handling, Reporting and Classification”; • billing, through the approval of the “Status Review on Implementation of the European Commission Billing Guidance for Good Practice”; • smart meters, through the approval of “the draft recommendations on smart metering”;

132 T he conclusions reached by the Forum and all the related documents are available on the European Commission website: http://ec.europa.eu/energy/gas_electricity_forum_electricity_florence_en.htm. 133 The conclusions reached by the Forum and all the related documents are available on the European Commission website: http://ec.europa/energy/gas_electricity/forum_electricity_florence_en.htm.

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• the competitive market for the end customer, through the approval of “the Guidelines on Retail Market Monitoring Indicators”. CEER presentations were given, prepared in the Working Group and its Task Forces, in which the CREG took an active part. The 2010 London Forum asked CEER to undertake the following actions with a view to the 2011 Forum: • submit a draft of a status review on the implementation of the Guidelines of Good Practice on Dispute Settlement/Complaint Handling; • continue to cooperate within the working groups set up by the European Commission on smart meters, put forward recommendations on regulation regarding smart meters and in particular their functionalities and services; • draft a benchmarking report on the role and responsibility of the energy regulators when increasing awareness among and protecting (vulnerable) consumers; • draft “guidelines of good practice” for price comparison instruments; • update the “guidelines of good practice” on switching”. Finally, the DG SANCO gave an exclusive presentation at the Forum of its study entitled “The functioning of retail electricity markets for consumers in the European Union”134, which is based on the results of the second “consumer markets scoreboard”135. A fourth “scoreboard” has since then been published (in November 2010) by the DG SANCO. The DG SANCO also announced during the London Forum that at the European Council meeting of 3 December 2010 it would communicate a Commission Staff Working Paper on the operation of retail electricity markets for consumers in the European Union136 and an energy policy for consumers137.

6.4.6. The CREG within CEER and ERGEG The CREG is a member of both CEER and of ERGEG. ERGEG is an independent consultative group for the electricity and gas sectors made up of energy regulators that was created to advise and assist the European Commission with a view to consolidating the internal energy market. CEER is a cooperation structure made up of these same regulators together with Norway and Iceland which prepares the work of ERGEG.

The activities prepared by CEER in 2010138 specifically include the third energy legislative package, the preparation and creation of an Agency for the Cooperation of Energy Regulators (ACER, cf. paragraph 6.4.2 above) and the establishment of framework guidelines intended ultimately to lead to network codes. The CEER “Energy Package” working group organised three workshops among national Regulation authorities, including one attended by the European Commission. These workshops enabled the national regulatory authorities to develop harmonised solutions to the problems encountered in the transposition of the third energy package. While waiting for ACER to become fully operational, CEER set a series of preparatory steps necessary for its creation (cf. paragraph 6.4.2 above) and undertook to make as much progress as possible in drafting the framework guidelines, the objective of which is to create a non-binding regulatory framework to establish an integrated electricity and gas network in Europe. Both in the Gas working group (Capacity Allocation Mechanism) and in the Electricity working group (Grid Connection), members worked first and foremost on pilot framework guidelines, which also highlighted a series of observations and recommendations on the procedure to be followed when drafting these guidelines. These pilot framework guidelines were drawn up by the CEER/ERGEG working group on electricity, networks and market, which is co-chaired by the CREG, and communicated to the European Commission as planned. This working group was also asked to draw up framework guidelines on capacity allocation and congestion management, in which CREG was particularly involved, an initial version of which was published and submitted for consultation in September and October 2010. An improved version, taking into account the results of the consultation, was to be sent to the European Commission in February 2011. Finally, the working group was also able to start work on the framework guidelines relating to system operation in 2010. Moreover, the ten regulators concerned are to consult one another with regard to their participation in the various working groups set up in the context of the North Sea Countries’ Offshore Grid Initiative. On 3 December 2010, representatives of the ten member states involved signed a Memorandum of Understanding and both ENTSO-E and the ten national regulatory authorities concerned signed a letter of intent139.

134 This study is available at http/:ec.europa.eu/conumsers/strategy/docs/retail_electricity_full_study_en.pdf. 135 http://ec.europa.eu/consumers/strategy/facts_en.htm; 136 http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2010/1409/COM_SEC(2010)1409_EN.pdf. 137 http://ec.europa.eu/energy/gas_electricity/doc/forum_citizen_energy/sec(2010)1407.pdf. The conclusions reached by the European Council of 3 December 2010 can be consulted via the following links: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdat/en/tran/118188.pdf and http://register.consilium.europa.eu/pdf/en/10/st16/st16300.en.pdf. 138 These activities are mentioned in the CEER Work Programme of 2010 (http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATINS/Work_Porgramme/Tab1/C09-WPDC-18-03_public-WP2010_10-Dec-09.pdf). 139 https://www.entsoe.eu/fileleadmin/user_upload/_library/news/MoU_North_Seas_Grid/01203_MoU_of_the_North_Seas_Countries_Offshore_Grid_Initiative.pdf.


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CEER paid particular attention to smart meters and smart grids in various working groups. For instance, in 2010 the RMC working group drew up Guidelines of Good Practice on Regulatory Aspects of Smart Metering for Electricity and Gas which were to be approved by the CEER general meeting in early 2011. After this, the “Customer Working Group” (new name: Retail Market and Customer Working Group) considered the Guidelines of Good Practice on Complaint Handling, the Billing Status Review and the Guidelines of Good Practice on Retail Market Indicators. In 2010, the Financial Services Working Group concentrated most of its attention on possible fraud mechanisms in the energy sector and in particular on derived products. In this context, contacts with the financial regulators organisation (CESR) were continued. This involved examining the need to adopt rules specifically for the sector on matters that are not governed by the (EC) “market abuse” directive or the EC directive on financial instruments markets, but which are nevertheless important in the context of transactions that take place on the energy markets. At the end of 2010 the European Commission published a draft regulation on this subject140. The Financial Services Working Group also produced a study on the basis of the questionnaire sent out to the national regulatory authorities with regard to VAT. The aim here is to provide an overview of the extent to which the national regulatory authorities study the VAT fraud mechanisms at the time of transactions on the electricity or gas market. The CREG also took part in answering the questionnaires sent out by CEER with regard, among other things, to VAT fraud, the procedure for adopting framework guidelines, climate change, CAPEX, compliance monitoring, the quality of regulation and the retail market (European Commission study). These questionnaires result in status reviews, position papers or other summarising documents, presenting not only the differences and similarities between the various member states but also the extent to which European legislation is implemented by the member states. Finally, CEER deployed actions at international level through the Florence School of Regulation, the IERN (International Energy Regulation Network) and the ICER (International Confederation of Energy Regulators), with a view to sharing knowledge and experiences with energy regulators beyond the borders of the European Union as well. It is also worth mentioning the regular contacts with the Federal Tariff Service in Russia and the CEER’s participation in the EU-Russia dialogue on gas supplies.

6.4.7. The CREG and the regional regulators The concertation between the national regulator (CREG) and three regional regulators (BRUGEL, CWaPE, VREG) or ‘Forbeg’ continued in 2010. Six plenary meetings were held. The VREG took the chair in the first half of 2010 and the CREG during the second half of the year. Over time, various working groups have been set up within the Forbeg concertation structure. In 2010, the CREG chaired the working groups on gas, the exchange of information and the complaints procedure. The gas working group met five times in 2010 and tackled the following subjects, among others: the L-gas market, natural gas supplies to Belgium, the code of conduct, the third European energy package, the technical regulations and DSOs’ connection contracts. The exchange of information working group met five times in 2010 and, as it does every year, took care of a publication by the four regulators on the development of the electricity and natural gas markets141. This publication notes, among other things, a spectacular increase in the number of takeovers (Essent by RWE, Nuon by Vattenfall, SPE by EDF) and describes the consequences of the merger between SUEZ and GDF (first year when Distrigas operated independently of GDF SUEZ, modification of the Fluxys shareholding body), as well as the implementation of the agreements reached under the Pax Electrica II (swaps, drawing rights, production capacity transfer). The working group also looked into the issue of the extent to which complementary elements could be included in future versions of the joint publication with regard to data on supplier switch and renewable energy. The exchange of information working group also discussed the possibility of aligning the structures of the annual activities reports from the regulators to the structure of the benchmark report drawn up in the context of the national reports passed on to the European Commission and used as basis for the ERGEG 2010 Status Review of the Liberalisation and Implementation of the Energy Regulatory Framework142. Eventually, the CREG alone decided to adapt the structure of its annual report along these lines. The complaints handling working group convened to meet in the attendance of the Federal Energy Ombudsman, given that he has been fully operational since 2010 (cf. paragraph 6.4.8 below). At the Forbeg plenary meeting, the progress of the work on the European third energy package and the launch of the European Agency for the Cooperation of Energy Regulators

140 http://ec.europa.eu/energy/gas_electricity/markets/doc/com_2010_0726_en.pdf. 141 http://www.creg.info/pdf/Presse/2010/compress27042010fr.pdf. 142 http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/NATIONAL_REPORTS/National%20Reporting%202010/C10-URB-34-04_StatusReview2010_v101201.pdf.

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(ACER, cf. paragraph 6.4.2 above) were mentioned regularly. Particular attention was also paid to the work of the European Commission and major publications were mentioned. Moreover, the CREG debriefed meetings of the General Assembly of CEER (cf. paragraph 6.4.6 above) and ACER and gave presentations on the subject of the proposed new transmission model, the North Sea Grid Initiative and the coupling of the Central West Europe – Nordic market for electricity. The VREG, meanwhile, systematically debriefed meetings of the CEER Customer Working Group and, together with the VREG, the CREG arranged wide-ranging debriefing on the London Forum (cf. paragraph 6.4.5 above).

Moreover, in 2010 the CREG continued to improve the contents of its website with a view to keeping consumers and market players better informed.

6.4.9. Participation of CREG members as speakers at seminars In addition to the presentations given as part of its legal missions (including within CEER), members of the CREG attended a number of seminars as speakers in 2010. In its capacity as a member of the CERRE (Centre on Regulation in Europe), the CREG also took part in certain activities run and organised by this body.

In addition, the following topics were covered within Forbeg in 2010: smart networks (policy platform, round table), private networks, MIG (cf. rules and procedures designed to enable the efficient transfer of data between the various players on the gas and electricity markets), injection rates, automatic granting of the social rate, recharging terminals for electric vehicles, fuel mix issue and a joint letter from the four regulators to the Minister for Energy recommending the abolition of the current mechanism for exemption from the federal contribution.

6.4.8. Handling questions and complaints In its reasoned opinion of 24 June 2010 (infringement No 2009/2211), the European Commission notes that Belgium has not created a structure at federal level to settle complaints or to provide for the reimbursement or compensation of end customers. Nor has it been demonstrated that such a mechanism exists in the Brussels Region and the Flemish Region. The justification given by Belgium of the existence of a Litigation Chamber, a federal mediator and regulations in the Brussels Region and in the Flemish Region was deemed inadequate in this respect by the European Commission. In the view of the Management Board, only an amendment of the law can provide a satisfactory response to these objections143. In 2010, the CREG took part in five meetings organised by the federal mediation service for energy. The main aim of these meetings was to organise the procedure for handling complaints that come under the jurisdiction of the energy regulators (CREG, CWaPE, VREG, BRUGEL) or the Federal Public Service for the Economy. As part of this cooperation, the CREG has analysed a number of complaints received by the mediator from end customers. The procedure for appointing the French-speaking federal mediator for energy is still under way. A call for applications was renewed in April 2010.

143 Study (F)100824-CDC-985.


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Table 23: Overview of presentations given by the CREG in 2010

Organising authority Febeliec FLAME

Florence school of Regulation AFG SRBE

SRBE European Energy Markets ‘10 VSGP World Energy Congress DEMSEE 2010 Instituut voor Milieu- en Energierecht (IMER) FEBEG E.on Febeliec SRBE

CMS De Backer Forbeg EMART

AFG PCG

Title of seminar Successfully managing Gas demand, Supply, Prices, Regulation & Investment in Europe’s Globalising Gas & LNG Markets Is there a need for regulation: what, why and how? L’accès des tiers au stockage Les réseaux intelligents

Journée d’étude SRBE sur les Smart Grids 7th international conference on the European Energy market Grid Intelligence

Title of presentation Gedragscode II Exploring the latest investment developments in Belgium

Date 13/01/2010 04/03/2010

Early findings from the 2009 ERGEG monitoring survey on natural gas hub regulation Le cas de la Belgique Les réseaux intelligents: rêve technocratique ou nécessité de demain ? Et le consommateur résidentiel dans tout cela ? Smart Grids, technocratische droom of de noodzaak van morgen? En wat met de residentiële gebruikers? Smart grids en smart meters: Comment et pourquoi ? Evolution ou révolution ? Possible impact of electric cars on electricity spot prices

04/03/2010 04/06/2010 17/06/2010

17/06/2010 25/06/2010

Toepassing van tarieven voor injectie op het 09/09/2010 distributienet Responding now to global Possible use of electric cars as balancing 15/09/2010 challenges instrument Smart grids and smart Smart grids en smart meters: How and 23/09/2010 meters why? Évolution ou révolution ? 12/10/2010 Permanente vorming klimaat- Liberalisering in netwerksectoren en energierecht GEREGULEERDE MEERJARENNETTARIEVEN ELEKTRICITEIT EN GAS Vervoersmodel aardgas 12/10/2010 Vervoersmodel aardgas 13/10/2010 Vervoersmodel aardgas 14/10/2010 Le changement de paradigme du réseau 20/10/2010 Gestion de la Demande électrique d’Électricité dans un environnement libéralisé avec intégration croissante d’énergies renouvelables La production d’énergie Toepassing van tarieven voor injectie op het 20/10/2010 décentralisée distributienet Consultatie vervoersmodel aardgas 25/10/2010 24/11/2010 EMART Energy 2010-12-22 Framework guidelines Capacity Allocation & Congestion Management: the calculation and allocation of transmission capacities (au nom de l’ERGEG) L’accès des tiers au stockage Le cas de la Belgique 25/11/2010 01/12/2010 The annual European Power Elaboration of the framework guidelines: The cases of Grid connection & Capacity generation strategy summit Allocation and Congestion Management 2010 Source: CREG

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6.5. The CREG finances 6.5.1. The federal contribution The federal contribution is a surcharge levied on the quantity of gas and electricity consumed in Belgium. This contribution is used to finance the various funds run by the CREG, which are discussed in paragraph 6.5.2 below. The quantity of electricity taken up on the transmission system in 2010 increased compared with 2009 but has not yet returned to the level recorded before the economic crisis, notably owing, for industrial customers, to the significant increase in own consumption (cf. paragraph 3.2.1 of this report). As regards the quantity of natural gas used in 2010, it appears that this has withstood the crisis better since it has returned to the level recorded before the crisis (cf. paragraph 4.2.1 of this report).

the TSO and the electricity companies (with regard to the federal contribution relating to deliveries prior to 1 July 2009) respectively amounted to € 53,975,032 and € 5,969,269 which have yet to be divided among the six funds for the 2010 financial year. n

Supplying the funds

As in previous years, the expected amounts of the federal contribution for the year 2010 consisted of the basic amount of each fund for the current year and possibly a supplementary amount to offset the shortfall from previous years. Taken as a whole, the revenue recorded from the federal contribution for electricity was 14 % less than the amounts expected in 2010. The shortfall in electricity revenue for the various funds compared with the amounts expected, including the aforementioned supplement, is therefore as follows: Table 24: Shortfalls recorded in the funds in 2010 (€)

A. The federal contribution for gas Each quarter the CREG bills the holders of a natural gas supply permit operating on the Fluxys transmission system144 or one fourth of the annual requirements of the gas funds. These suppliers finance the CREG fund (and its reserve), the social energy fund, the protected customers fund and the heating grant fund directly. Consequently the receipts booked by the CREG for each of these funds exactly match the expected amounts. As at 31 December 2010, however, the suppliers still owed a total of € 539,133. n

Annual adjustment

Each year, a comparison between the amount claimed by the CREG and the amount that suppliers were actually able to invoice their customers during the previous year (2009) gives rise to adjustments. For the CREG, social energy and protected customers funds, this is an adjustment in favour of the funds of € 221,024, € 627,558 and € 712,147 respectively. However, for the heating grant fund, the adjustment amounts to € 27,073 in favour of the suppliers. B. The federal contribution for electricity Each quarter the TSO, Elia, pays into the CREG single federal contribution fund the contribution it has invoiced to its customers in the previous quarter. The amount collected is then divided among the CREG, social energy, denuclearisation, greenhouse gas, protected customers and heating grant funds. As at 31 December 2010, the total amount in the federal contribution fund stood at € 61,768,390. The federal contribution and the degressivity certified in the last quarter by

CREG

1,409,600

Social energy

5,925,841

Denuclearisation

16,932,764

Greenhouse gases

8,256,337

Protected customers

8,211,463

Heating grant

1,554,540 Source: CREG

n

Exemption and degressivity

With the “cascade” levy system in force since July 2009 (cf. 2009 Annual Report, paragraph 6.1.2, p. 66), the electricity companies have in principle been billed upstream of the cascade for the entire federal contribution, whereas they are only able to recover the total amount from their end customers subject to the deduction, where appropriate, of the exemption and degressivity measures. Provision is therefore made for these companies to claim the refund of these two measures from the CREG every quarter. In 2010, the CREG therefore booked the sums of € 18,797,840 and € 37,266,184, corresponding respectively to the exemptions from greenhouse gases and denuclearisation contributions granted by these companies to their end customers. Refunds to electricity companies are made directly using the resources available in these two funds. During the same period, the Federal Public Service for Finance provided the sum of € 45,488,235 for the CREG to enable it to cover the degressivity refunded to suppliers. In addition to this amount and in accordance with the Electricity Act145, the CREG also received the sum of € 3,000,000 from ONDRAF/NIRAS (the Belgian agency for radioactive waste

144 As at 31 December 2010, twelve suppliers were active on the transmission grid (SPE having taken over the customers of EDF Belgium on 1 October 2010). 145 Article 21bis, § 3, de la loi du 29 avril 1999 relative à l’organisation du marché de l’électricité, tel que modifié par la loi-programme du 22 décembre 2008. CREG Annual report 2010

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6. The CREG

and enriched fissile materials), taken from the BP1/BP2 fund and € 2,650,000 from the operating fund of Belgoprocess (company specialising in the management of radioactive waste and the decommissioning of nuclear facilities). As the degressivity certified for 2010 as a whole amounts to € 49,055,950, the sum of € 2,082,285 will have to be refunded to the Federal Public Service for Finance in 2011.

As at 31 December 2010, the overall amount available in the fund stood at € 11,913,364, including interest and amounts still to be distributed from the federal contribution fund. This amount will not be sufficient to pay the entire fourth instalment for 2010 to the Public Centres for social well-being at the start of 2011.

n Amounts

The Denuclearisation Fund

irrecoverable

Finally, it should be stressed that the growing number of unpaid electricity bills is impacting on the federal contribution fund managed by the CREG. In fact, every year the CREG settles with the electricity companies the flat-rate amounts (0.7 %) corresponding to the increase in the federal contribution which they have applied to offset the federal contribution billed which may not have been paid to them by the end customer. The irrecoverable amounts of the federal contribution refunded by the CREG to certain companies in this way are higher than the amounts received from other companies. Overall, for 2009 the amounts irrecoverable represent 1.3 % of the receipts from the federal contribution. The accumulated shortfall of € 1,036,677 had to be cleared in 2010 by means of a levy from the various funds financed by the federal contribution.

The CREG Fund

This fund, which is supplied exclusively by the federal contribution charged by the electricity sector, should have stood at € 55,000,000 for 2010 (cf. 2009 Annual Report, paragraph 6.2.3, p. 68), plus € 23,843,807 to offset shortfalls from the past and repay the European institutions. Income of € 99,177,227 was recorded in the fund, from which € 37,266,184 should be deducted as exemptions refunded to the electricity companies. Apart from the payment of the balance from 2009 (€ 27,330,000), in 2010 the CREG was therefore only able to pay to ONDRAF/NIRAS the sum of € 17,750,000 out of the sum of € 41,250,000 which it should have received in 2010 to fulfil its denuclearisation task. The payment arrears to ONDRAF/NIRAS is still increasing, particularly since the schedules for receipt of the federal contribution paid by the TSO and refund to the suppliers of exemption from the “denuclearisation” contribution meant that the CREG was obliged to maintain operating fund of € 10,000,000 to make these reimbursements within the deadlines set by law.

The partial cover of the total operating costs of the CREG was set by Royal Decree on 9 March 2010 confirmed by the Act of 29 December 2010 at € 15,146,140 for the year 2010.

As at 31 December 2010, the total amount in the fund stood at € 25,734,402, including the amounts still to be distributed from the federal contribution fund.

The CREG accounts for 2010 are set out in detail in paragraph 6.5.3.

The Greenhouse Gases Fund

6.5.2. The funds

The Social Energy Fund For 2010, a total of € 49,511,288 was provided to help the Public Centres for social well-being with their task of providing guidance and financial social support in the field of energy. This sum was made up of € 28,785,633 from the electricity sector and € 20,725,655 from the natural gas sector. However, these amounts were supplemented by € 6,508,211 and € 9,526, respectively to offset the shortfalls of the past and repay the European institutions. The total revenue eventually booked for electricity in 2010 was € 29,368,003. The planned amount for the gas fund was achieved. In addition to the balance payable to the Public Centres for social wellbeing for 2009 (€ 11,072,576), the cash assets only made it possible to redistribute € 38,187,847 of the € 40,922,327 required by the Federal Public Planning Service for Social Integration in 2010.

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This fund, which is supplied exclusively by the federal contribution charged by the electricity sector, should have stood at € 28,683,289 for the year 2010, plus € 10,650,589 to offset the shortfalls from the past and repay the European institutions. Income of € 49,875,381 was booked in the fund, from which the sum of € 18,797,840 has to be deducted as exemptions refunded to electricity companies. Unlike the denuclearisation fund, which is used in full as soon as it is supplied, there are sums which are not used immediately and which enable the reimbursement to suppliers of the exemption from the greenhouse gases contribution while awaiting receipt of the federal contributions paid by the TSO. As is the case every year, the CREG paid the sum of € 2,300,000 for the year 2011 in advance into the organic budget fund of the Federal Public Service for the Environment, intended for the annual financing of the federal policy on the

6. The CREG

reduction of greenhouse gas emissions, which it manages. In addition, following the modification of Article 12 of the “federal electricity contribution” Royal Decree, the CREG may owe the Federal Public Service for the Environment additional sums146 amounting to € 2,000,000 for 2010 and € 1,300,000 for 2011. Every year the greenhouse gases fund also prefinances the sum of € 11,550,000 corresponding to the VAT due on the annual amount to be paid to ONDRAF/NIRAS. The VAT authorities refunded to the CREG the quarterly sums thus paid. As at 31 December 2010, the overall amount in the fund stood at € 41,265,845, including interest and the amounts still to be distributed from the federal contribution fund. No additional amounts were transferred this year from the greenhouse gases fund to the Kyoto Joint Implementation/ Clean Development Mechanism fund (Kyoto JI/CDM). It should be remembered that this fund sets aside resources which are intended specifically to fund projects to reduce emissions of greenhouse gases abroad, enabling Belgium to acquire emission quotas with a view to attaining its targets in the context of the Kyoto protocol. In 2010, the sum of € 26,339,099 was drawn on the Kyoto JI/CDM fund for the purchase of CO2 emission credits. As at 31 December 2010, the total amount in the Kyoto JI/ CDM fund stood at € 97,013,391, including interest.

92,639,735 respectively, including interest and sums still to be distributed from the federal contribution fund. The fund for flat-rate reductions for heating using natural gas and electricity For the year 2010 a total sum of € 9,988,339 was provided to enable the financing of the flat-rate discounts provided for by the programme law of 8 June 2008 for heating with natural gas and electricity. This amount consists of € 6,891,954 from the electricity sector and € 3,096,385 from the natural gas sector. These amounts are, however, supplemented respectively by € 1,984,069 and € 1,424 to offset the shortfalls of the past and repay the European institutions. Total income of € 7,321,483 was eventually booked in 2010 for electricity. The amount planned for gas was actually recorded. Apart from the payment of the 2009 balances relating to grants for electricity (€ 4,147,782) and natural gas (€ 775,000), no other payments were paid into the organic budget fund run by the Directorate-General for Energy in 2010. In fact, noting the absence of any legal basis for its use during the year 2010, the CREG suspended all additional payments. The balance as at 31 December 2010, amounting to € 7,072,905, corresponds to the amounts recorded as at that date for the electricity TSO and the natural gas companies and that had not been paid into the organic budget fund. A legal allocation of these funds will need to be found once the annual adjustments with the natural gas suppliers have been made in 2011.

The Protected Customers Funds For the year 2010, the needs of these funds, defined by the Royal Decree of 9 March 2010 confirmed by the Act of 29 December 2010, should have stood at a total of € 64,000,000 for electricity and € 33,900,000 for natural gas, to which should have been added € 202,362 and € 20,949 respectively to repay the European institutions. Ultimately, only € 55,990,899 was booked in the electricity fund in 2010. As regards the natural gas fund, however, the planned sum was in fact recorded. Repayments to companies in the sector that supplied protected household customers at maximum social rates in 2010 amounted to € 452,207 for electricity suppliers and € 135,749 for natural gas suppliers. The small amount of repayments in 2010 is due in particular to the fact that most of the dossiers are incomplete and to the fact that the Royal Decrees on ‘protected customer claims’ had not yet been published at the end of 2010. As at 31 December 2010, the total amounts of the two funds for electricity and gas stood at € 132,108,438 and €

The fund to offset the loss of revenue suffered by the municipalities Further to the negative opinion No 48.153/1/3 from the Council of State on 27 April 2010, the Flemish authorities managing the funds of the municipalities, with which the CREG was in negotiation with regard to the settlement for 2009 with the Flemish municipalities (cf. 2009 Annual Report, paragraph 6.2.7, p. 69) was obliged to waive this transaction. The CREG itself therefore undertook the settlement of € 12,856,802 with the municipalities to which sums were due, having recovered the sum of € 88,565 from municipalities liable for payments. As at 31 December 2010, the sum of € 574,280 corresponding to the interest collected since 2005 remains in the accounts of the CREG as the interest on the fund capital is only supposed to be used to reimburse suppliers for charges linked to their prefinancing during the period from August 2005 to 31 July 2006 (Article 9, § 3 of the Ministerial Decree

146 Act of 29 December 2010 containing various provisions (Belgian Official Journalof 31 December 2010). CREG Annual report 2010

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of 13 May 2005 implementing Article 22bis of the Electricity Act). However, these reimbursements have already been effected. A legal allocation of these funds will need to be found.

6.5.3. The accounts for 2010 On the one hand, the CREG was only able to take note of the prolonged effects of the economic crisis on this income from the electricity sector. On the other hand, it observed charges that remain high further to recourse against its decisions. Taking this as a starting point, it has brought its staff costs and other operating expenses under control by not replacing members of staff who have left the CREG over the year and by reducing the calls made upon external consultants to carry out studies. Both staff costs and other operating expenses therefore remained within the limits set by the budget. The total charges of the CREG for the 2010 financial year consequently amounted to just € 13,595,714, which corresponds to 91 % of the total budget initially planned (€ 14,860,634, without bringing the reserve up to the required level and excluding off-budget expenses). It should be noted, however, that legal fees relating to appeals lodged against decisions taken by the CREG (€ 646,952) are up on the previous year and they alone account for over 21 % of the total operating costs for 2010. Although the total income from the electricity sector only amounted to 88 % of the expected amounts, at the end of 2010 the CREG nevertheless benefited from two salutary extraordinary receipts. On the one hand, it recovered its 2009 membership subscription to a non-profit association following the winding up of this association (€ 99,500) and on the other hand it received a settlement further to the adjustment resulting from the structural reductions in the social charges for the years 2008 and 2009 (€ 611,656). The income and expenditure of the CREG are broken down between the two energy sectors. For the 2010 financial year, thanks to the extraordinary income referred to above, the surplus income collected by the CREG compared with its actual charges amounted to € 1,115,908, divided between surpluses of € 246,742 in favour of the electricity sector and € 869,166 in favour of the natural gas sector. The surplus booked in 2010 for the electricity sector will be used entirely for the partial re-establishment of the sector

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reserve. In fact, a great deal was drawn from this reserve in 2009 (cf. 2009 Annual Report, paragraph 6.3, p. 69) to cover the shortfall in the electricity sector. The surplus booked in 2010 for the natural gas sector will have to be repaid to the gas companies in 2011 by means of an adjustment. This surplus includes the excess surcharges actually recovered in 2009 by the natural gas suppliers from their customers (€ 221,024) which were adjusted in 2010. However, the amount of revenue earned by the natural gas suppliers in 2010 was not yet known as at 31 December 2010. Finally, the adjustment of the surplus collected by the CREG relating to the natural gas sector, which was noted in the CREG accounts in 2009 (cf. 2009 Annual Report, paragraph 6.3, p. 69) was effected in favour of the natural gas sector.

6. The CREG

Table 25: Income statement as at 31 December 2010 (€)

Personnel costs Salaries and charges Variation provisions employment agreements for Management Board members Variation provisions for holiday bonuses Temporary staff Recruitment costs Training, seminars Leasing company cars Value added tax Bodies Indemnities, General Council (attendance fees and various expenses) “Personnel costs” sub-total External experts External studies Communication service Translators, Auditor, external payroll service provider Legal fees relating to lawsuits Operating costs Rental and charges - premises Parking facility rental Building maintenance and security Equipment maintenance and servicing Documentation Telephone, post, Internet Office supplies Costs of meetings and expenses Travel expenses (including abroad) Membership of associations Insurance, taxes and sundry costs Value added tax Depreciation costs Depreciation on tangible fixed assets Depreciation on leasing Financial costs Financial charges on leasing and loans Other “Other operating costs” sub-total TOTAL CHARGES Income (surcharges and fees) Operating cost surcharges Gas suppliers’ adjustment, year n-1 CREG adjustment electricity, year n CREG adjustment gas, year n Other fees Financial income Income from current assets Other financial income Extraordinary income Other extraordinary income TOTAL INCOME RESULT FOR FINANCIAL YEAR

2010 10,459,025 9,937,241 71,266 –930 20,714 9,500 106,882 254,612 59,740 74,927 74,927 10,533,952 1,029,523 217,793 49,535 115,243 646,952 1,914,169 913,042 65,885 120,785 47,198 108,660 43,987 58,706 98,564 57,244 61,207 146,234 192,657 109,119 98,831 10,288 8,951 2,773 6,178 3,061,762 13,595,714 12,830,023 13,707,590 221,024 –246,742 –869,166 17,317 6,599 6,542 57 759,092 759,092 13,595,714 0

2009 10,121,156 9,587,997 –128,243 119,048 1,432 121,429 104,097 237,483 77,913 59,250 59,250 10,180,406 949,232 316,205 19,310 101,132 512,585 2,017,658 894,822 59,182 115,901 48,286 122,873 44,472 60,936 84,769 52,256 134,981 225,350 173,830 107,585 90,502 17,083 5,142 3,013 2,129 3,079,617 13,260,023 13,205,883 12,911,059 730,574 818,481 –1,261,574 7,343 19,239 19,212 27 34,901 34,901 13,260,023 0 Source: CREG


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6. The CREG

Table 26 : Balance sheet as at 31 December 2010 (€)

FIXED ASSETS Intangible and tangible fixed assets IT and telephone equipment Security equipment, video surveillance Office furniture and decoration Building refurbishment Leasing Leased equipment Financial fixed assets Various guarantees Cautions diverses CURRENT ASSETS Amounts receivable within one year Trade debtors Other amounts receivable Cash at bank and in hand Federal contribution fund CREG fund Social Energy Fund Greenhouse Gases Fund Denuclearisation Fund Kyoto Fund JI/CDM Protected Customers Fund - Electricity Protected Customers Fund - Gas Municipalities Fund Heating Grant Fund Cash Deferrals and accruals TOTAL ASSETS LIABILITIES CAPITAL AND RESERVES Profit brought forward CREG sector reserve Electricity Gas Provisions Employment agreements for Management Board members AMOUNTS PAYABLE Amounts payable at more than one year Leasing obligations Amounts payable within one year Current portion of amounts payable at more than one year Trade debts Taxes, salaries and social charges payable Advances received Various debts Social Energy Fund Greenhouse Gases Fund Denuclearisation Fund Kyoto Fund JI/CDM Protected Customers Fund - Electricity Protected Customers Fund - Gas Municipalities Fund Heating Grant Fund Federal contribution and degressivity Accruals and deferrals TOTAL LIABILITIES

96

2010

2009

209,575 57,635 7,016 24,601 120,323 20,962 20,962 608 608

208,593 56,758 10,524 15,901 125,410 31,250 31,250 608 608

585,202 39,473 545,729 417,815,247 61,768,390 3,219,311 5,051,910 31,290,683 1,389,895 97,005,861 119,942,061 92,217,966 574,125 5,353,666 1,377 1,147,040 419,778,634

476,840 37,566 439,274 311,184,143 30,319,624 3,711,463 6,963,232 8,278,569 672,104 120,803,456 68,609,361 57,758,420 13,305,152 761,441 1,321 1,022,246 312,923,680

2010

2009

1,314,222 1,441,323 750,304 691,019

1,314,222 1,196,185 503,562 692,623

290,314

219,048

17,799 17,799 3,342,391 6,641 1,808,100 1,527,650 0 413,366,683 11,913,364 41,265,845 25,734,402 97,013,391 132,108,438 92,639,735 574,280 7,071,524 5,045,704 5,902 419,778,634

24,440 24,440 3,932,180 9,339 1,754,473 2,166,868 1,500 305,853,256 10,643,449 12,815,526 5,284,657 120,880,809 76,594,477 58,028,392 13,305,704 1,634,724 6,665,518 384,349 312,923,680 Source: CREG


6. The CREG

6.5.4. The company auditor’s report on the financial year closed on 31 December 2010 In accordance with the assignment entrusted to us by the Management Board pursuant to Article 9, §1 of the Royal Decree of 10 October 2001 (on approval of the internal rules), we have the honour of reporting to you on the accounts for the past financial year. This report contains our opinion on the accounts as well as the required additional statements and information.

Unqualified audit opinion on the accounts We have audited the accounts of the Commission for the financial year ended 31 December 2010, prepared in accordance with the valuation rules adopted by the Management Board. These accounts are summarised in a balance sheet, the total of which amounts to 419,778,634 EUR and an income statement, the balance of which stands at 0 EUR, in accordance with the Royal Decrees of 24 March 2003 on the financing of the Commission, with the total income and charges standing at 13,595,714 EUR. The Management Board is responsible for the preparation of the accounts. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation of the accounts that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate valuation rules; and making accounting estimates that are reasonable in the circumstances. Our responsibility is to express an opinion on these accounts based on our audit. We conducted our audit in accordance with the auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Reviseurs d’Entreprises / Instituut der Bedrijfsrevisoren). Those standards require that we plan and perform the audit to obtain reasonable assurance whether the accounts are free from material misstatement, whether due to fraud or error. In accordance with the above-mentioned auditing standards, we considered the Commission’s accounting system as well as its internal control procedures. We have obtained from the Management Board and the Commission’s officials, the explanations and information necessary for executing our audit procedures. We have examined, on a test basis, the evidence supporting the amounts included in the accounts. We have assessed the appropriateness of valuation rules and the reasonableness of the significant accounting estimates made by the Commission. We believe that these procedures provide a reasonable basis for our opinion.

financial year give a true and fair view of the assets, the financial position and the results of the Commission in accordance with the valuation rules adopted by the Management Board.

Additional statements and information We would like to supplement our report with the following additional statements and information, which do not modify our audit opinion on the accounts: • Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the general rules of the Act of 17 July 1975 on corporate accounting. • As specificied in the annual report drawn up by the Management Board, the amount of the adjustment for the 2010 financial year between the gas suppliers and the Commission, calculated in accordance with Article 5, §2 of the Royal Decree of 24 March 2003 on the financing of the Commission by the gas market, was unknown on the date on which the accounts of the Commission as per 31 December 2010 were established and could therefore not be taken into account. The adjustment relating to the previous financial year was duly booked however. • We have not established any infringements of the “Electricity” and “Gas” Acts or their implementing decrees as regards transactions referred to in the accounts of the Commission.

Brussels, 28 January 2011 André KILESSE Auditor

In our opinion, the balance sheet for the year ended 31 December 2010 and the income statement for the 2010


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6.6. List of acts of the CREG during the year 2010 Tariff decisions (B)628E/19 à (B)628E/22 • INTER-ENERGA (elektriciteit) : beslissingen over het tariefvoorstel met budget voor de regula04.02.2010 → 16.12.2010 toire periode 2009-2012, over de initiële waarde van het gereguleerd actief, over de vraag tot goedkeuring van het tariefvoorstel met budget voor het exploitatiejaar 2007 en van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)628G/15 à (B)628G/16 • INTER-ENERGA (aardgas) : beslissingen over het tariefvoorstel met budget voor de regulatoire 04.02.2010 → 16.12.2010 periode 2009-2012 en over de vraag tot goedkeuring van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)629E/09 16.12.2010

• INTER-ENERGA (elektriciteit) : beslissing over de vraag tot goedkeuring van het vervolledigde tariefvoorstel met budget voor de netten met een transmissiefunctie voor het laatste jaar van de regulatoire periode 2008-2011

(B)631E/19 à (B)631E/21 • IVEG (elektriciteit) : beslissingen over het tariefvoorstel met budget voor de regulatoire pe04.02.2010 → 16.12.2010 riode 2009-2012, over de vraag tot goedkeuring van het tariefvoorstel met budget voor het exploitatiejaar 2007 en van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)631G/15 à (B)631G/16 • IVEG (aardgas) : beslissingen over het tariefvoorstel met budget voor de regulatoire periode 04.02.2010 → 16.12.2010 2009-2012 en over de vraag tot goedkeuring van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)632E/16 à (B)632E/18 • PBE (elektriciteit) : beslissingen over het tariefvoorstel met budget voor de regulatoire periode 04.02.2010 → 16.12.2010 2009-2012, over de vraag tot goedkeuring van het tariefvoorstel met budget voor het exploitatiejaar 2007 en van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)633E/19 à (B)633E/21 • INFRAX WEST (elektriciteit) : beslissingen over het tariefvoorstel met budget voor de regula04.02.2010 → 16.12.2010 toire periode 2009-2012, over de vraag tot goedkeuring van het tariefvoorstel met budget voor het exploitatiejaar 2007 en van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)633G/15 à (B)633G/16 • INFRAX WEST (aardgas) : beslissingen over het tariefvoorstel met budget voor de regulatoire 04.02.2010 → 16.12.2010 periode 2009-2012 en over de vraag tot goedkeuring van het vervolledigde tariefvoorstel met budget voor de 2 laatste jaren van de regulatoire periode 2009-2012 (B)634E/14 à (B)634E/15 • GASELWEST (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)634G/14 à (B)634G/15 • GASELWEST (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)635G/14 à (B)635G/15 • IMEA (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)636E/14 à (B)636E/15 • IMEA (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)637E/14 à (B)637E/15 • IMEWO (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)637G/14 à (B)637G/15 • IMEWO (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010

• Confidential

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(B)638E/14 à (B)638E/15 • INTERGEM (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)638G/14 à (B)638G/15 • INTERGEM (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)639E/14 à (B)639E/15 • IVEKA (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)639G/14 à (B)639G/15 • IVEKA (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)640E/14 à (B)640E/15 • IVERLEK (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)640G/14 à (B)640G/15 • IVERLEK (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)641E/14 à (B)641E/15 • SIBELGAS (elektriciteit) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)641G/14 à (B)641G/15 • SIBELGAS (aardgas) : beslissingen over de saldi betreffende het exploitatiejaar 2009 21.10.2010 → 25.11.2010 (B)642E/10 23.12.2010

• AIEG (électricité) : décision relative aux soldes rapportés concernant l’exercice d’exploitation 2009

(B)643E/10 à (B)643E/11 • AIESH (électricité) : décisions relatives aux soldes rapportés concernant l’exercice d’exploita25.11.2010 → 23.12.2010 tion 2009 (B)644E/20 04.02.2010

• TECTEO (électricité) : décision relative à la proposition tarifaire accompagnée du budget pour la période régulatoire 2009-2012

(B)645G/14 à (B)645G/15 • ALG (gaz naturel) : décisions relatives à la demande d’approbation de la proposition tarifaire 02.09.2010 accompagnée du budget pour l’exercice d’exploitation 2007 ainsi qu’à l’application des tarifs pour le même exercice d’exploitation 2007 et à la constatation d’un bonus ou d’un malus résultant des tarifs appliqués pour l’exercice d’exploitation 2008 (B)646E/14 à (B)646E/16 • RÉGIE DE L’ÉLECTRICITÉ DE LA VILLE DE WAVRE (électricité) : décisions relatives à la 29.04.2010 → 14.10.2010 constatation de l’existence d’un bonus ou d’un malus résultant des tarifs appliqués au cours de l’exercice d’exploitation 2008 et pour l’exercice d’exploitation 2006 (B)655E/10 02.12.2010

• SIBELGA (électricité) : décision relative aux soldes rapportés concernant l’exercice d’exploitation 2009

(B)655G/10 02.12.2010

• SIBELGA (gaz naturel) : décision relative aux soldes rapportés concernant l’exercice d’exploitation 2009

(B)658E/15 à (B)658E/16 • ELIA : décisions relatives aux soldes rapportés concernant l’exercice d’exploitation 2009 12.05.2010 → 25.06.2010 (B)658E/17 22.10.2010

• ELIA : décision relative au retrait de la décision (B)030320-CDC-130 du 20 mars 2003 relative aux conditions générales de la convention provisoire pour l’utilisation non exclusive du réseau Elia par des utilisateurs éligibles raccordés aux réseaux de distribution établis en région wallonne ou en région bruxelloise

• Confidential CREG Annual report 2010

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Other acts (F)100204-CDC-929 04.02.2010

• Étude relative à l’impact possible de la voiture électrique sur le système électrique belge Studie over de mogelijke impact van de elektrische auto op het Belgische elektriciteitssysteem

(F)100107-CDC-934 07.01.2010

• Étude relative aux composantes des prix de l’électricité et du gaz naturel Studie over de componenten van de elektriciteits- en aardgasprijzen

(A)100114-CDC-935 14.01.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een bijvoegsel bij de vervoersvergunning voor de vervoersinstallaties DN600 LD Antwerpen (SIBP) – Schelle en DN400 HD Antwerpen (GCA) – Hoboken

(F)100114-CDC-936 14.01.2010

• Étude relative au développement d’un marché régional compétitif du gaz naturel à faible pouvoir calorifique Studie over de uitbouw van een regionale competitieve markt voor laagcalorisch aardgas

(A)100121-CDC-937 21.01.2010

• Avis relatif à la demande de la S.A. Fluxys pour l’octroi d’une autorisation de transport A3233745 pour la modification de la station de compression à Haccourt (Oupeye)

(B)100114-CDC-938 14.01.2010

• Décision relative à la demande d’approbation de modification du programme indicatif de transport de la S.A. Fluxys relatif à ses activités d’acheminement pour la période 2010-2011 Beslissing over de vraag tot goedkeuring van de wijziging van het indicatief vervoersprogramma van de N.V. Fluxys voor wat betreft haar overbrengingsactiviteiten voor de periode 2010-2011

(B)100121-CDC-939 21.01.2010

• Décision sur la proposition (à nouveau) adaptée de contrat standard d’accès du client final au réseau de transport de gaz naturel (appelé le « contrat standard de raccordement ») Beslissing over het (andermaal) aangepaste voorstel van standaardcontract voor de toegang van de eindafnemer tot het aardgasvervoersnet (het zgn. ”standaard aansluitingscontract”)

(A)100121-CDC-940 21.01.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een vervoersvergunning voor de vervoersinstallaties DN250 HD Evergem (Caelbeek - Doornzele) en DN150 HD Evergem (Doornzele) – Algist Bruggeman

(B)100121-CDC-941 21.01.2010

• Onderzoek over de controle op de redelijkheid van de directe en indirecte kosten van de permanente expert en de overige kosten van Sibelgas cvba

(E)100204-CDC-942 04.02.2010

• Proposition relative à la nécessité d’un renouvellement des autorisations individuelles de production de SPE S.A., suite à son changement de contrôle par le rachat de SEGEBEL S.A. par EDF Belgium S.A.

(F)100129-CDC-943 29.01.2010

• Étude relative à l’aperçu des contrats à prix fixes sur le marché résidentiel de l’électricité et du gaz Studie over het overzicht van de contracten tegen vaste prijzen op de residentiële markt voor elektriciteit en gas

(F)100128-CDC-944 28.01.2010

• Étude sur une première estimation du coût des mesures visées à l’article 7 de la loi du 29 avril 1999 relative à l’organisation du marché de l’électricité Studie over de eerste raming van de kostprijs van de maatregelen bedoeld in artikel 7 van de wet van 29 april 1999 betreffende de organisatie van de elektriciteitsmarkt

(F)100211-CREG-945 11.02.2010

• Etude relative à la possible connexion entre le terminal GNL de Dunkerque et le réseau de transport de gaz naturel belge Studie betreffende de mogelijke verbinding tussen de LNG-terminal te Duinkerke en het Belgisch aardgasvervoersnet

(A)100211-CDC-946 11.02.2010

• Avis relatif à la demande d’approbation des modifications proposées par Belpex concernant le règlement de marché de Belpex Advies over de aanvraag tot goedkeuring van de door Belpex voorgestelde wijzigingen aan het Belpex marktreglement

• Confidential • Published on www.creg.be

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6. The CREG

(F)100218-CDC-947 18.02.2010 + erratum 12/05/2010

• Étude relative au marché belge à court terme d’électricité Belpex et à l’utilisation de la capacité aux interconnexions avec la France et les Pays-Bas en 2009 Studie over de Belgische kortetermijnmarkt voor elektriciteit Belpex en het gebruik van de capaciteit op de interconnecties met Frankrijk en Nederland in 2009

(F)100909-CDC-948 09.09.2010

• Étude relative à la qualité du paramètre Nc Studie over de kwaliteit van de Nc-parameter

(B)100211-CDC-949 11.02.2010

• Beslissing om [confidentiel] geen administratieve geldboete op te leggen

(B)100211-CDC-950 11.02.2010

• Beslissing om [confidentiel] geen administratieve geldboete op te leggen

(A)100225-CDC-951 25.02.2010

• Avis relatif à l’octroi d’une autorisation individuelle de fourniture de gaz naturel à ENLOGS Energy Logistics and Services GmbH

(T)100225-CDC-952 25.02.2010

• Verslag van de feitelijke vaststellingen betreffende de directe en indirecte kosten van de permanente expert en de overige kosten van Sibelgas cvba

(A)100311-CDC-953 11.03.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een bijvoegsel bij de vervoersvergunning A322-54 voor de vervoersinstallatie Herent (Winksele) – Compressiestation

(A)100305-CDC-954 05.03.2010

• Avis relatif à la demande de la S.A. Fluxys pour l’octroi d’une autorisation de transport A3233751 concernant une DN250 BP Charleroi – IGH Viaduc 2

(A)100318-CDC-955 18.03.2010

• Avis relatif à l’indépendance d’un administrateur indépendant au sein du conseil d’administration du gestionnaire du réseau national de transport d’électricité

(A)100401-CDC-956 01.04.2010

• Avis relatif à l’octroi d’une autorisation individuelle de fourniture de gaz naturel à Gas Natural Europe SAS

(A)100401-CDC-957 01.04.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een vervoersvergunning voor de vervoersinstallaties DN150 HD Leuven (Wilsele ontspanning – Kesselstraat) en DN150 HD Leuven (Wilsele Kesselstraat) – AB Inbev

(F)100401-CDC-958 01.04.2010

• Étude relative à l’achat d’énergie pour la compensation des pertes d’énergie par les gestionnaires de réseau de distribution entre 2006 et 2008 Studie over de aankoop van energie voor de compensatie van de netverliezen door de distributienetbeheerders tussen 2006 en 2008

(F)100401-CDC-959 01.04.2010

• Étude relative à l’éventuelle suppression ou exonération des tarifs d’injection pour les installations de production sur la base de l’énergie renouvelable et de la cogénération qualitative Studie betreffende de mogelijke schrapping of vrijstelling van injectietarieven voor de productieinstallaties op basis van hernieuwbare energie en kwalitatieve WKK

(B)100401-CDC-960 01.04.2010

• Décision relative à la demande d’approbation de modification du programme indicatif de transport de la S.A. Fluxys relatif à ses activités d’acheminement pour la période 2010-2011 Beslissing over de vraag tot goedkeuring van de wijziging van het indicatief vervoersprogramma van de N.V. Fluxys, voor wat betreft haar overbrengingsactiviteiten voor de periode 2010-2011

(F)100415-CDC-961 15.04.2010

• Étude relative à la demande d’élargissement du champ d’application de l’arrêté royal du 16 juillet 2002 relatif à l’établissement de mécanismes visant la promotion de l’électricité produite à partir de sources d’énergie renouvelables aux installations de cogénération reliées au réseau de transport fédéral Studie over de vraag tot uitbreiding van het toepassingsgebied van het koninklijk besluit van 16 juli 2002 betreffende de instelling van mechanismen voor de bevordering van elektriciteit opgewekt uit hernieuwbare energiebronnen, op kwalitatieve warmtekrachtinstallaties aange sloten op het federaal transmissienet

• Confidential • Published on www.creg.be CREG Annual report 2010

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6. The CREG

(F)100416-CDC-962 16.04.2010

• Étude relative aux modifications à apporter à la loi du 29 avril 1999 relative à l’organisation du marché de l’électricité en vue d’améliorer le fonctionnement et le suivi du marché de l’électricité Studie over wijzigingen aan te brengen aan de wet van 29 april 1999 betreffende de organisatie van de elektriciteitsmarkt voor het verbeteren van de werking en de opvolging van de elektriciteitsmarkt

(B)100422-CDC-963 22.04.2010

• Décision relative à la modification des conditions générales des contrats de responsable d’accès proposés par le gestionnaire du réseau de transport d’électricité aux utilisateurs du réseau Beslissing over de wijziging van de algemene voorwaarden van de contracten van toegangsverantwoordelijke aangeboden door de transmissienetbeheerder voor elektriciteit aan de netgebruikers

(B)100429-CDC-964 29.04.2010

• Décision relative aux règles complémentaires pour le calcul de la marge à calculer afin de définir les prix maximaux d’électricité à appliquer aux clients non protégés dont le contrat de fourniture a été résilié Beslissing over de nadere regels betreffende de berekening van de marge te berekenen voor de bepaling van de maximumprijzen elektriciteit toe te passen op niet-beschermde gedropte klanten

(B)100429-CDC-965 29.04.2010

• Décision relative aux règles complémentaires pour le calcul de la marge à calculer afin de définir les prix maximaux du gaz naturel à appliquer aux clients non protégés dont le contrat de fourniture a été résilié Beslissing over de nadere regels betreffende de berekening van de marge te berekenen voor de bepaling van de maximumprijzen aardgas toe te passen op niet-beschermde gedropte klanten

(F)100520-CDC-966 20.05.2010

• Étude relative aux différents mécanismes de soutien de l’électricité verte en Belgique Studie over de verschillende ondersteuningsmechanismen voor groene stroom in België

(Z)100422-CDC-967 22.04.2010

• Rapport comparatif des objectifs formulés dans la note de politique générale de la CREG et des réalisations de l’année 2009 Vergelijkend verslag van de doelstellingen geformuleerd in het beleidsplan van de CREG en van de verwezenlijkingen van het jaar 2009

(F)100506-CDC-968 06.05.2010

• Étude sur la structure de coûts de la production d’électricité par les centrales nucléaires en Belgique Studie over de kostenstructuur van de elektriciteitsproductie door de nucleaire centrales in België

(B)100512-CDC-969 12.05.2010

• Décision relative à la demande d’approbation de modification du programme indicatif de transport de la S.A. Fluxys, relatif à ses activités de stockage, pour la période 2010-2011 Beslissing over de vraag tot goedkeuring van de wijziging van het indicatief vervoersprogramma van de N.V. Fluxys, voor wat betreft haar opslagactiviteiten, voor de periode 2010-2011

(E)100603-CDC-970 03.06.2010

• Voorstel betreffende de toekenning van individuele vergunningen voor de vestiging van twee installaties voor de productie van elektriciteit op de site van Dilsen door DILS-ENERGIE N.V.

(C)100527-CDC-971 27.05.2010

• Proposition d’arrêté royal portant modification de l’article 7, §2, de l’arrêté royal du 16 juillet 2002 relatif à l’établissement de mécanismes visant la promotion de l’électricité produite à partir de sources d’énergie renouvelables Voorstel van koninklijk besluit tot wijziging van artikel 7, §2, van het koninklijk besluit van 16 juli 2002 betreffende de instelling van mechanismen voor de bevordering van elektriciteit opgewekt uit hernieuwbare energiebronnen

(F)100610-CDC-972 10.06.2010

• Étude relative à la faisabilité de l’instauration d’une tarification progressive de l’électricité en Belgique Studie betreffende de haalbaarheid van de invoering van een progressieve prijszetting van elektriciteit in België


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(B)100617-CDC-973 17.06.2010 + erratum 15/07/2010

• Décision relative à la demande d’approbation de modification du programme indicatif de transport de la S.A. Fluxys relatif à ses activités d’acheminement pour la période 2010-2011 Beslissing over de vraag tot goedkeuring van de wijziging van het indicatief vervoersprogramma van de NV Fluxys, voor wat betreft haar overbrengingsactiviteiten voor de periode 2010-2011

(F)100610-CDC-974 10.06.2010

• Étude complémentaire à l’étude (F)060309-CDC-537 relative à l’impact du système des quotas d’émissions de CO2 sur le prix de l’électricité en Belgique en 2009 Studie aanvullend bij studie (F)060309-CDC-537 over de impact van het systeem van CO2emissierechten op de elektriciteitsprijs in België in 2009

(A)100624-CDC-975 24.06.2010

• Avis relatif à la demande de la S.A. Fluxys pour l’octroi d’un avenant à l’autorisation de transport A322-2826 pour le prolongement de la canalisation DN250 HP Mons (Obourg-Nimy)

(A)100708-CDC-976 08.07.2010

• Avis relatif à l’octroi d’une autorisation individuelle de fourniture de gaz naturel à natGas Aktiengesellschaft

(F)100708-CDC-977 08.07.2010

• Étude relative à la facturation des tarifs d’injection pour les producteurs décentralisés en cas de tarifs reflétant les coûts de raccordement et de tarification de l’utilisation du réseau Studie betreffende de aanrekening van injectietarieven voor decentrale producenten in geval van kostenreflectieve aansluitingstarieven en tarifering voor het gebruik van het net

(F)100708-CDC-978 08.07.2010

• Studie betreffende de opmerkingen over het artikel “Nuclear Market Power: Taxation or Liberalization?” mede geschreven door professor Proost (KULeuven)

08.07.2010

• Rapport annuel 2010 de la Belgique à la Commission européenne

(R)100715-CDC-979 15.07.2010

• Lignes directrices concernant la distinction entre activités régulées et non régulées du gestionnaire de réseau de distribution Richtlijnen over de scheiding tussen gereguleerde en niet gereguleerde activiteiten van de distributienetbeheerder

(B)100715-CDC-980 15.07.2010

• Beslissing betreffende de vraag tot goedkeuring van de wijziging van het contract voor het aankopen van groenestroomcertificaten tussen de N.V. Elia System Operator en de N.V. Belwind

(B)100812-CDC-981 12.08.2010


(B)100826-CDC-982 26.08.2010

• Décision sur la demande d’approbation de la méthode d’évaluation et de la détermination de la puissance de réserve primaire, secondaire et tertiaire pour 2011 Beslissing over de vraag tot goedkeuring van de evaluatiemethode voor en de bepaling van het primair, secundair en tertiair reservevermogen voor 2011

(RA)1008246-CDC-983 26.08.2010

• Rapport relatif au caractère manifestement déraisonnable ou non des prix offerts à Elia System Operator NV pour la fourniture de services auxiliaires pour l’exercice d’exploitation 2011

(F)101105-CDC-984 05.11.2010

• Étude relative aux modifications à apporter à la loi du 12 avril 1965 relative au transport de produits gazeux et autres par canalisations en vue d’améliorer le fonctionnement et le suivi du marché du gaz naturel et conformément à la directive 2009/73/CE du Parlement européen et du Conseil du 13 juillet 2009 concernant des règles communes pour le marché intérieur du gaz naturel et abrogeant la directive 2003/55/CE Studie over de wijzigingen aan te brengen aan de wet van 12 april 1965 betreffende het vervoer van gasachtige producten en andere door middel van leidingen voor het verbeteren van de werking en de opvolging van de aardgasmarkt en in overeenstemming met de Richtlijn 2009/73/EG van het Europees parlement en de Raad van 13 juli 2009 betreffende gemeen schappelijke regels voor de interne markt voor aardgas en tot intrekking van Richtlijn 2003/55/ EG


103

6. The CREG

(F)100824-CDC-985 24.08.2010

• Étude relative aux objections de la Commission européenne telles que décrites dans son avis motivé du 24 juin 2010 (infraction n° 2009/2211) Studie over de bezwaren van de Europese Commissie zoals beschreven in haar met redenen omkleed advies van 24 juni 2010 (overtreding n° 2009/2211)

(F)101105-CDC-986 05.11.2010

• Étude relative aux modifications à apporter à la loi du 29 avril 1999 relative à l’organisation du marché de l’électricité en vue d’améliorer le fonctionnement et le suivi du marché de l’électricité et conformément à la Directive 2009/72/CE du Parlement européen et du Conseil du 13 juillet 2009 concernant des règles communes pour le marché intérieur de l’électricité et abrogeant la Directive 2003/54/CE Studie over de wijzigingen aan te brengen aan de wet van 29 april 1999 betreffende de organisatie van de elektriciteitsmarkt voor het verbeteren van de werking en de opvolging van de elektriciteitsmarkt en in overeenstemming met richtlijn 2009/72/EG van het Europees Parlement en de Raad van 13 juli 2009 betreffende gemeenschappelijke regels voor de interne markt voor elektriciteit en tot intrekking van Richtlijn 2003/54/EG

(F)100902-CDC-987 02.09.2010

• Étude relative à l’impact de l’arrêt de centrales nucléaires sur le prix de vente de l’électricité au client final domestique Studie over de impact van de stopzetting van de kerncentrales op de verkoopprijs van elektriciteit aan de huishoudelijke eindafnemer

(B)100930-CDC-988 30.09.2010


(B)100930-CDC-989 30.09.2010

• Décision relative à la demande d’approbation du programme indicatif de terminalling 20112012 de la S.A. Fluxys LNG Beslissing over de vraag tot goedkeuring van het indicatief terminallingprogramma 2011-2012 van de N.V. Fluxys LNG

(A)100930-CDC-990 30.09.2010

• Avis relatif à la demande d’approbation des modifications proposées par Belpex au règlement de marché de Belpex Advies over de aanvraag tot goedkeuring van de door Belpex voorgestelde wijzigingen aan het Belpex marktreglement

(F)101208-CDC-991 08.12.2010

• Étude relative à la comparaison entre les prix payés par Elia System Operator S.A. pour l’achat d’énergie en compensation des pertes actives sur ses réseaux régionaux avec les prix de l’énergie payés par les grands clients industriels au cours de l’exercice d’exploitation 2009

(F)101014-CDC-992 14.10.2010

• Étude relative à la relation entre les coûts et les prix des importateurs, des revendeurs et des fournisseurs sur le marché belge résidentiel et industriel du gaz naturel sur la période 2007-2009 Studie over de verhouding tussen de kosten en de prijzen van invoerders, doorverkopers en leveranciers op de Belgische residentiële en industriële aardgasmarkt tijdens de periode 2007-2009

(B)101007-CDC-993 07.10.2010

• Décision relative à la demande d’approbation de la proposition de la S.A. Elia System Operator de modification des méthodes de gestion de la congestion et des méthodes pour l’allocation aux responsables d’accès de la capacité disponible pour les échanges d’énergie avec le réseau français et avec le réseau néerlandais, telles qu’établies dans le cadre de l’initiative régionale Centre-Ouest européenne Beslissing over de aanvraag tot goedkeuring van het voorstel van de NV Elia System Operator tot wijziging van de methodes voor congestiebeheer en de methodes voor de toekenning aan de toegangsverantwoordelijken van de capaciteit die beschikbaar is voor energie-uitwisselingen met het Franse en het Nederlandse net, zoals vastgelegd in het kader van het Centraal West-Europees regionaal initiatief


104


6. The CREG

(A)101014-CDC-994 14.10.2010

• Avis relatif au projet de plan de développement 2010-2020 de la S.A. Elia System Operator Advies over het ontwerp van ontwikkelingsplan 2010-2020 van de N.V. Elia System Operator

(F)101007-CDC-995 07.10.2010

• Étude relative à la comparaison des prix de l’électricité pour un ménage consommant 3.500 kWh d’électricité grise (tarif unique) à Bruxelles, Paris, Berlin, Amsterdam et Londres Studie over de vergelijking van de elektriciteitsprijzen voor een gezin met een verbruik van 3.500 kWh grijze elektriciteit (enkelvoudig tarief) in Brussel, Parijs, Berlijn, Amsterdam en Londen

(B)101026-CDC-997 26.10.2010

• Décision relative à la demande d’approbation de la proposition de la S.A. Elia System Operator relative au plan général pour le calcul de la capacité totale de transfert et de la marge de fiabilité du transport et aux méthodes de gestion de la congestion pour les échanges d’énergie avec le réseau français et avec le réseau néerlandais, telles qu’établies dans le cadre du couplage des marchés de la région Centre-Ouest européenne Beslissing over de aanvraag tot goedkeuring van het voorstel van de NV Elia System Operator betreffende het algemeen model voor de berekening van de totale overdrachtcapaciteit en de transportbetrouwbaarheidsmarge en betreffende de methodes voor congestiebeheer voor energie-uitwisselingen met het Franse en het Nederlandse net, zoals vastgelegd in het kader van de marktkoppeling van de Centraal West-Europese regio

(B)101028-CDC-998 28.10.2010

• Décision relative à la demande d’approbation de la proposition de la S.A. Elia System Operator relative aux méthodes de gestion de la congestion et aux méthodes pour l’allocation aux responsables d’accès de la capacité disponible en journalier sur les interconnexions BelgiqueFrance et Belgique-Pays-Bas au moyen d’enchères implicites faite dans le cadre du couplage des marchés de la région Centre-Ouest européenne Beslissing over de aanvraag tot goedkeuring van het voorstel van de NV Elia System Operator betreffende de methodes voor congestiebeheer en de methodes voor het toekennen, aan de toegangsverantwoordelijken, van de beschikbare dagcapaciteit op de koppelverbindingen België-Frankrijk en België-Nederland via impliciete veilingen, gedaan in het kader van de marktkoppeling van de Centraal West-Europese regio

(F)101014-CDC-999 14.10.2010

• Étude sur l’accord nucléaire en Allemagne et son application en Belgique Studie over het nucleair akkoord in Duitsland en de toepassing ervan op België

(E)101014-CDC-1000 14.10.2010

• Proposition relative à l’octroi d’une autorisation de fourniture d’électricité à la Pfalzwerke A.G.

(F)101208-CDC-1001 08.12.2010

• Studie over de vergelijking van de prijzen die Eandis cvba betaalde voor de aankoop van energie ter compensatie van actieve verliezen op haar distributienetten met de energieprijzen betaald door de grote industriële klanten tijdens het exploitatiejaar 2009

(A)101021-CDC-1002 21.10.2010

• Avis relatif à la demande de la S.A. Fluxys pour l’octroi d’une autorisation de transport A3233754 concernant une DN300 HP Visé (Quai des Fermettes) – SPE Lixhe (Navagne)

(Z)101028-CDC-1003 28.10.2010

• Note de politique générale pour l’année 2011 Beleidsplan voor het jaar 2011

(F)101021-CDC-1004 21.10.2010

• Étude relative aux composantes des prix de l’électricité et du gaz naturel Studie over de componenten van de elektriciteits- en aardgasprijzen

(F)101208-CDC-1005 08.12.2010

• Étude relative à la comparaison entre les prix payés par les GRDs mixtes wallons regroupés au sein de ORES SCRL pour l’achat d’énergie en compensation des pertes actives sur les réseaux régionaux avec les prix de l’énergie payés par les grands clients industriels au cours de l’exercice d’exploitation 2009

(C)101208-CDC-1006 08.12.2010

• Proposition sur le calcul de la surcharge destinée à compenser le coût réel net supporté par le gestionnaire du réseau résultant de l’obligation d’achat et de vente des certificats verts en 2011

(A)101028-CDC-1007 28.10.2010

• Avis relatif à la demande de la S.A. Fluxys pour l’octroi d’une autorisation de transport A3233795 concernant une DN150 HP Lessines-Baxter


105

6. The CREG

(A)101028-CDC-1008 28.10.2010

• Advies over de toekenning van een individuele leveringsvergunning voor aardgas aan Progress Energy Services BVBA

(E)101202-CDC-1009 02.12.2010

• Voorstel betreffende de toekenning van een vergunning voor de levering van elektriciteit aan Essent Belgium N.V.

(A)101104-CDC-1010 04.11.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een vervoersvergunning voor de vervoersinstallatie DN300 LD Merelbeke (Gaversesteenweg) – Gent (Zwijnaarde Ringvaart)

(A)101104-CDC-1011 04.11.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een vervoersvergunning voor de vervoersinstallatie Dendermonde (Oudegem Paalstraat) – Station Ontspanning

(B)101118-CDC-1012 18.11.2010

• Beslissing over de aanvraag van Belwind voor toekenning van groenestroomcertificaten voor de elektriciteit opgewekt door windturbines A04, B02, B06, B07 en C02 op de Blighbank

(A)101104-CDC-1013 04.11.2010 + erratum 08/12/2010

• Avis relatif au projet d’arrêté royal modifiant l’arrêté royal du 20 décembre 2000 relatif aux conditions et à la procédure d’octroi des concessions domaniales pour la construction et l’exploitation d’installations de production d’électricité à partir de l’eau, des courants ou des vents, dans les espaces marins sur lesquels la Belgique peut exercer sa juridiction conformément au droit international de la mer Advies over het ontwerp van koninklijk besluit tot wijziging van het koninklijk besluit van 20 december 2000 betreffende de voorwaarden en de procedure voor de toekenning van domeinconcessies voor de bouw en de exploitatie van installaties voor de productie van elektriciteit uit water, stromen of winden, in de zeegebieden waarin België rechtsmacht kan uitoefenen overeenkomstig het internationaal zeerecht

(B)101125-CDC-1015 25.11.2010

• Beslissing over de aanvraag van Belwind voor toekenning van groenestroomcertificaten voor de elektriciteit opgewekt door windturbines A05, A10, B01, B03, B05, B08, B09, B10, C03, C04, C05, C06, C07, C09, C10, D01, D02, D03, D04, D05, D06, D07, D10, F03 en F05 op de Blighbank

(B)101118-CDC-1016 18.11.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een vervoersvergunning voor de vervoersinstallatie DN250 HD Brugge (Dudzele P.S. - Oostkerkestraat)

(B)101118-CDC-1017 18.11.2010

• Advies over de aanvraag van de N.V. Fluxys voor de toekenning van een bijvoegsel bij de vervoersvergunning voor de vervoersinstallatie Brugge (Dudzele Oostkerkestraat) - Station

(B)101125-CDC-1018 25.11.2010

• Décision relative à la demande d’approbation de la proposition de la S.A. Elia System Operator relative aux méthodes de gestion de la congestion et aux méthodes pour l’allocation aux responsables d’accès de la capacité disponible sur l’interconnexion Belgique-France Beslissing over de aanvraag tot goedkeuring van het voorstel van de N.V. Elia System Operator betreffende de methoden voor congestiebeheer en de methoden voor de toekenning van de beschikbare capaciteit op de koppelverbinding België-Frankrijk aan de toegangsverantwoordelijken

(B)101125-CDC-1019 25.11.2010

• Décision relative à la modification des conditions générales des contrats de responsable d’accès proposés par le gestionnaire du réseau aux utilisateurs du réseau Beslissing over de wijziging van de algemene voorwaarden van de contracten van toegangsverantwoordelijke aangeboden door de transmissienetbeheerder voor elektriciteit aan de netgebruikers

(F)101202-CDC-1020 02.12.2010

• Étude relative à l’évolution du terme fixe et/ou de capacité dans le réseau de distribution entre 2003 et 2009 Studie over de evolutie van de vaste en/of capaciteitsterm in het distributienettarief tussen 2003 en 2009

(E)101125-CDC-1021 25.11.2010

• Voorstel betreffende de toekenning van een individuele vergunning voor de bouw van een warmtekrachtkoppelingeenheid door de N.V. Stora Enso Langerbrugge te Langerbrugge (Gent)


106


6. The CREG

(E)101125-CDC-1022 25.11.2010

• Proposition relative à ‘l’octroi d’une autorisation de fourniture à Enovos Luxembourg S.A.

(E)101202-CDC-1023 02.12.2010

• Proposition relative à l’octroi d’une autorisation individuelle relative à l’extension d’une installation de production d’électricité (parc éolien) à Mettet/Fosses-la-Ville par la S.A. Électricité du Bois du Prince

(B)101202-CDC-1024 02.12.2010

• Décision relative à la modification des conditions générales des contrats de responsable d’accès proposés par le gestionnaire du réseau aux utilisateurs du réseau Beslissing over de wijziging van de algemene voorwaarden van de contracten van toegangsverantwoordelijke aangeboden door de transmissienetbeheerder voor elektriciteit aan de netgebruikers

(F)101208-CDC-1025 08.12.2010

• Étude relative aux mécanismes de fixation des prix de l’énergie en vigueur en 2009 au sein des contrats de fourniture d’électricité des grands clients industriels de Electrabel S.A.

(A)101208-CDC-1026 08.12.2010

• Avis relatif à l’octroi d’une autorisation individuelle de fourniture de gaz naturel à Enovos Luxembourg S.A.

(B)101223-CDC-1027 23.12.2010

• Décision sur la demande d’approbation de la méthode d’évaluation et de la détermination de la puissance de réserve primaire, secondaire et tertiaire pour 2011

(B)101223-CDC-1028 23.12.2010

• Décision concernant la proposition de la S.A. Elia System Operator concernant les règles de fonctionnement du marché relatif à la compensation des déséquilibres quart-horaires pour l’année 2011 Beslissing over het voorstel van de NV Elia System Operator betreffende de werkingsregels van de markt voor de compensatie van de kwartieronevenwichten voor 2011

(B)101208-CDC-1029 08.12.2010

• Décision relative à la demande d’approbation du programme indicatif de transport de la S.A. Fluxys relatif à ses activités d’acheminement pour la période 2011-2012 Beslissing over de vraag tot goedkeuring van het indicatief vervoersprogramma van de NV Fluxys, voor wat betreft haar overbrengingsactiviteiten voor de periode 2011-2012

(B)101216-CDC-1030 16.12.2010

• Beslissing over de aanvraag van Belwind voor toekenning van groenestroomcertificaten voor de elektriciteit opgewekt door windturbines A01, A02, A03, A06, A07, A08, A09, B04, C01, D09, E01, E02, E03, E04, E05, E06, E07, E08, E09, E10, F02 en F04 op de Blighbank

(A)101216-CDC-1031 16.12.2010

• Advies over de toekenning van een individuele leveringsvergunning voor aardgas aan Essent Belgium N.V.


107

Chief Editor Bernard LACROSSE Rue de l’Industrie, 26-38 1040 Brussels Design and production www.inextremis.be

Rue de l’Industrie, 26-38 • 1040 Brussels Tel. +32 (0)2 289.76.11 • Fax +32 (0)2 289.76.09 E-mail: [email protected] • www.creg.be