Grid operator Elia asks for higher return ahead of major grid investments
High-voltage grid operator Elia wants the federal energy regulator CREG to grant it an internationally competitive return on the capital it invests in Belgium. The move could push up electricity bills for households and businesses. However, failing to invest in the grid would ultimately cost consumers more, the company argues.
Elia Transmission Belgium has a monopoly on the management of the high-voltage grid in the country. As a result, the tariffs that the company is allowed to charge are strictly regulated by the Federal Commission for Electricity and Gas Regulation (CREG), with the permitted profit determined in advance.
Elia currently receives a return on its investments that is well below the European average of 10 per cent, according to Bernard Gustin, CEO of the Elia Group. That is why it is pushing for market-based return on its equity capital for the next tariff period starting in 2028.
According to Gustin, this is necessary to attract sufficient investors. "The challenge facing Elia in the coming years is to finance all the necessary investments. This requires a market-based return," he said. The group is aiming for a return of around 9 per cent. Discussions with CREG are ongoing.
Higher electricity bills
The issue is politically sensitive, as a higher return on equity would lead to higher tariffs for households and businesses. Gustin says the impact would remain limited. For the average consumer, bills would increase by about 6 euros in the first year, with no further increases in subsequent years.
Failing to invest would be far more costly for consumers in the long term, Gustin added. "Europe must become less dependent on gas and fossil fuels. Look at what is happening with gas prices today. The only solution is electrification and investment in the grid. Otherwise, in ten years' time, we will regret not having invested today."
Billions in investments
Elia plans to invest billions of euros in Belgium and Germany in the coming years. In Germany, the group operates part of the grid together with grid operator 50Hertz.
Off the Belgian coast, Elia is building Princess Elisabeth Island, an artificial energy island designed to collect electricity from offshore wind farms and bring it ashore. Construction of the island itself is progressing rapidly, according to the company.
Elia is also planning new high-voltage lines to transport additional electricity inland, including the Ventilus and Boucle du Hainaut projects. For Ventilus, the company hopes to secure the necessary permits by the end of April so construction can begin.
© BELGA PHOTO NICOLAS MAETERLINCK
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