On 7 February 2018, the European Commission approved, under EU State aid rules and according to the 2014 Guidelines on State Aid for Environmental Protection and Energy, Belgian plans to set up a strategic reserve to keep certain capacity outside the electricity market for operation only in emergencies. The reserve is needed to mitigate the supply risks due to the country’s high reliance on an ageing nuclear fleet, including when it comes to imported electricity.
Strategic reserves can be necessary to ensure security of electricity supply when electricity markets are undergoing transitions and reforms and are meant to insure against the risk of a severe supply crisis during such transitions.
According to the Belgian measure, financial support will be provided to capacity providers to offer capacity when demand is highest, such as during winter conditions. The reserve will be contracted through a competitive process open to all types of potential capacity providers, including both power plants and demand response operators, and its volume will be determined by a thorough assessment made by the Belgian Transmission System Operator (TSO).
The reserve will be used only after all market-based solutions to the scarcity problem are fully exhausted and will be removed when the underlying market issue is solved.
Further information is available at the following LINK.
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