On Friday 27 August, the European Commission approved Belgium’s capacity mechanism to guarantee the security of the country’s electricity supply, deeming it to be in line with European Union State aid rules.
The first capacity mechanism validated by the European Commission after the entry into force of the new EU Regulation (2019/943) on the internal market for electricity, this mechanism aims to encourage energy capacity providers (both producers and demand-side management operators) to offer their availability to the transmission system operator (TSO).
Following an in-depth investigation (see EUROPE 12564/8), the European Commission found no evidence that the mechanism would disadvantage certain technologies or unfairly limit the participation of cross-border capacity. Nor did it find any evidence that the scheme would reduce incentives for TSOs to invest in interconnection capacity.
“We have approved a well-designed capacity mechanism that will contribute to ensuring the security of electricity supply in Belgium, in particular in view of the upcoming phasing out of all (Belgian) nuclear capacity by 2025, while ensuring that possible distortions of competition are kept to a minimum”, said European Commission Executive Vice-President for Competition Policy Margrethe Vestager.
She also welcomed the introduction of certain sustainability requirements for new Belgian fossil fuel installations that will participate in the mechanism. (Original version in French by Damien Genicot)