Energy is one of the key themes of the 21st century. Energy issues are becoming increasingly complex year after year and the challenges of availability and access to energy at affordable prices for all are growing on a daily basis. In fact, the briefest period of uncertainty about energy supplies is sufficient to demonstrate clearly our vulnerability and dependence on energy at every level.
Backed by a team of enthusiastic employees, the CREG’s Board of Directors is fully committed to responding to these challenges. In a context of rapid change, the CREG is being assigned more and more duties. The CREG’s operations encompass three strategic priorities: liberalized activities, regulated activities and the flexibility of the energy system.
With regard to liberalized activities, the CREG’s mission is to improve the operation of the market through continuous monitoring on behalf of consumers. The CREG also approves measures to make energy markets more accessible and simpler. With regard to the retail market, in 2014 the CREG paid specific attention to the proper implementation of the price comparison websites good practice charter by those service providers that signed up to it in 2013. In June, it published an evaluation report of the safety net mechanism (introduced on 1 January 2013) which showed that there had been no disruptive effect on the market and that Belgian prices had moved towards the average of neighbouring countries. The CREG continuously monitors every component of energy prices in Belgium as this is a basic element for price comparison by the consumer. A campaign for better information for SMEs and the self-employed (a CREG strategic objective) was launched in December through a workshop.
With regard to the monitoring of wholesale prices, in 2014 the CREG conducted several studies on the energy pricing mechanisms used in supply contracts for major industrial customers. The CREG conducted these studies in order to trigger action and introduce initiatives in the event of irregularities. The CREG also devotes particular attention to the impact of wholesale market developments on retail markets.
Small and medium consumers traditionally pay less attention to the second priority, which is the regulation of transmission system activities. However, this is a strategic task to ensure the best prices and services for the consumer. Through its regulatory functions (such as approval of the tariff methodology and network access tariffs, approval of operating rules and auditing), the CREG ensures that network operators develop safe and reliable networks in the most cost-effective way, for the benefit of consumers. In this context, the CREG established its proposed tariff methodology in mid-2014 for the 2016-2019 regulatory period. It did this in constructive dialogue with Fluxys Belgium and Fluxys LNG for the gas infrastructure and with Elia System Operator for the electricity transmission system. After consultation with market actors, at the end of 2014 this process resulted in the transmission tariff setting methodology. This new methodology is the first separate full tariff framework designed by the CREG. It introduces new elements that contribute, inter alia, to tariff objectivity and transparency and incentives for the network operators focusing on cost control and quality of service provision.
Finally, the third priority relates to support for energy transition. The CREG is responsible for encouraging the maximum development of flexibility in the Belgian market as part of effective market mechanisms and to promote innovation. To ensure the security of the country’s energy supply, in early April 2014 the authorities decided to establish a strategic reserve for use in winter peak periods. Under its statutory powers in this specific case and as part of its advisory role to the authorities, the CREG issued an opinion on whether or not the price of all the bids proposed by the network operator is obviously unreasonable. In its study on the «Belgian wholesale market in the event of electricity scarcity and shortage», the CREG concludes that risks to security of supply could largely be mitigated if the energy market functioned properly and if the network was managed efficiently. In the field of offshore, the CREG has studied the possibilities of developing an offshore network and connection of wind farms. The study brought together market players to enable the establishment of this renewable energy project, which is essential for a balanced energy mix.
The third priority is intrinsically linked to the international context. At European level, 2014 was described repeatedly as a pivotal year for the creation of the European single energy market. Through intense bilateral, regional (in the European sense of the word) and European collaboration, the CREG is seeking optimal integration of the regulatory framework of the Belgian electricity and natural gas markets. The challenges are myriad: it is necessary to work under existing legislation; at the same time, the energy systems must be allowed to prepare themselves for a low-carbon future and the end customer must be able to benefit in full from the liberalization process.
As part of its daily regulatory practice, it is up to the CREG to take up the central role of assessing, implementing and coordinating, through continuous dialogue and without prejudice to its independence, the necessary trade-offs between the different interests expressed within the complex integration dynamics of the Belgian energy markets, with the sole purpose of upholding the general interest of the country and that of the Belgian consumer. The European Commission’s analyses last year clearly showed the small number of complaints, the increased confidence and expansion of supply that moved Belgium up the European ranking of consumer markets. The CREG interpreted this as a sign of encouragement to continue to invest in integrated solutions through partnership and consultation beyond borders.