Distribution costs
Component 3 – all other costs
In Belgium, several additional fees apply to electricity. Because of the existence of three regions, these costs often have different rates that are only applicable to a specific region. To summarise the above, two aspects must be taken into account when looking at the other costs. Firstly, there are costs on the federal level and the three regional levels. Secondly, there are PSOs on one side and taxes, levies and surcharges on another side. These costs are summarised below with a distinction between average costs to all three Belgian regions and the one's specific per region. It is to be noted that federal charges are levied by the Belgian TSO (Elia), and regional DSOs levy regional charges. Tariff rates are mentioned when they do not vary depending on the consumer profile and/or the DSO; otherwise, units in which they are expressed are detailed:
Table 28 : Other costs for residential and small professional electricity consumers applying in all three Belgian regions70
All regions Profiles
Federal Public Service Obligations (Federal PSOs) on transmission71
a. Financing for the connection of offshore wind turbine parks (0,084 EUR/MWh);
b. Financing for green certificates (federal)72 (11,6852 EUR/MWh);
c. Financing for strategic reserves (0,051 EUR/MWh)73;
All
Regional Public Service Obligations (Regional PSOs) Regional PSOs on distribution74
a. A general tariff for regional PSOs (expressed in EUR/MWh) All
Taxes and levies on the federal level
a. Federal contribution75 (3,4700 EUR/MWh);
b. Energy contribution76 (1,9261 EUR/MWh).
a. All b. E-RES
and E-SSME
Degressivity exists on the federal contribution and the funding for green certificates PSO for consumers, from a specific consumption threshold, which are part of a sectoral agreement. Below this threshold, the degressivity is automatically applied. The sectoral agreement scheme does not exist in Brussels, which is why the degressivity is automatically applied to all consumers.
69 The number of EAN connections for Flanders at their 2020 level and for Wallonia at their 2018 level.
70 The tariffs shown are those as approved for Elia for 2021, but as already stated in the text, for Flanders and Wallonia these were only published from 03/2021, so that for these regions 2020 values are still used in the calculations for this study.
71 The three categories of costs under the Federal PSOs are grouped as the “ELIA surcharge” for Brussels
72 This only encompasses activities that are not a competence of the Belgian regions and the “pioneers” of solar energy (Wolters Kluwer, 2013)
73 The financing of strategic reserve PSO is taken into account starting E2.
74 For each region of Belgium, we compute the tariff through a weighted average of each component across all DSO active in the region (weights are given in terms of number of EAN connection per DSO).
75 In all three regions, federal contribution is to be increased by 1,1%. Firstly, to compensate for the administrative and financial costs of the electricity supplier and secondly to compensate for the part of the federal contribution that would not be paid by the end-consumer. There is an additional 0,1% increase for profiles connected to the distribution grid to compensate for the administrative costs of the DSO (Art. 4bis and 4ter Royal Decree 24 March 2003).
76 Not applicable on E-BSME profile because it has a connection level > 1kV.
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Table 29 : Regional other costs for residential and small professional electricity consumers77
Brussels Flanders Wallonia Profiles
Regional Public Service Obligations (Regional PSOs) Regional PSOs on transmission
Taxes and levies on the regional level Regional taxes and levies on distribution a. Charges on non-capitalised
a. Levy for occupying road network (0,002832 - 2,9379 EUR/MWh)
All
b. Levy for occupying road network (3,541 - 7,081 EUR/MWh)
b. Contribution for the energy fund80(0,43 – 155,51 EUR/month)
b. Corporate income tax (0,8586 - 4,3922 EUR/MWh) c. Corporate income tax and
other taxes (0,921 -4,064 Regional taxes and levies on transmission
- a. Levy for the taxes pylons
and trenches in Flanders (0,0001441 EUR/kWh)
a. Connection fee (0,075 for the first 100 kWh; 0,3 - certificate schemes that come as another indirect cost. Even though these schemes mechanisms are similar, they present regional differences. Every year, suppliers must reach a certain quota, differing depending on the region, of green certificates, or they are fined. Suppliers charge these additional costs to their customers, and since these fines can vary between suppliers, the costs for the customers also vary. We take into account the extra “Green Certificate costs” surcharge published by each of the selected suppliers on their tariff sheets in each of the regions. In Wallonia, there is a reduction on the green certificate scheme for holders of a climate change or sector agreement, which we consider applies to profile E1 and above and is therefore not taken into account
77 The tariffs represented in this table vary depending on the DSO and we have thus chosen to only present the minimum and maximum range of the tariff from the largest (or only) DSO of the region. Sibelga for Brussels, Imewo for Flanders and ORES Hainaut for Wallonia.
78 (Sibelga, 2020)
79 In Wallonia a partial exemption of 85% applies for holders of a sectoral energy efficiency agreement, meaning that the E-BSME profile can profit from this reduction.
80 (Vlaamse Overheid, sd)
FORBEG – A European comparison of electricity and natural gas prices for residential, small professional and large
for residential and small professional consumers81. Flanders also has a reduction on the green certificate scheme which is based on the Nace-code and the total consumption.
Besides, while there is a green certificate system for renewable energies in each region, Flanders also has a certification scheme for combined heat/power (WKK).
Component 4 – VAT
There is no reduced VAT electricity for residential consumers in Belgium, and it is thus subjected to an additional 21%. The VAT is presented as a different price component. However, this VAT is not due on the federal contribution, the contribution for the energy fund in Flanders and the connection fee in Wallonia.
Germany
Component 1 – the commodity price
Germany had an HHI-index, not retrieved from CEER, of 2.021 for the retail market in 201482. We thus consider three products for both profiles E-RES and E-SSME: the standard product of the market incumbent, the cheapest product of the market incumbent, and the most competitive offer on the market. However, Germany presents peculiarities leading to separately identifying each mentioned product for each region:
- As detailed in the methodology section of Germany, different areas are taken into account because of the existence of price divergences and all have different standard products called Grundversorgung.
- For some regions, the cheapest product was also the most affordable product of the market incumbent.
Consequently, the 4th product – the cheapest from the second-largest player - replaces the 3rd product.
Yet, the 2nd largest supplier can differ from one region to another, which is why we have taken the assumption that the supplier, from the table below, that offers the cheapest product in that region is probably the 2nd most significant supplier of that region (as long as it is not the market incumbent).
When this occurs, products’ weights are normalised according to the market shares presented below.
Table 30 : Market share of German energy suppliers
Energy supplier Market share83
RWE AG 21,00%
EnBW AG 13,00%
E.ON AG 15,00%
Vattenfall Europe AG 13,00%
Stadtwerke und andere öffentliche
Anbieter84 29,00%
Alternative private Stromanbieter 9,00%
The German annual switching rate is of 10,2% for household (profile E-RES) and 12,7% for non-household (profile E-SSME) consumers. In previous countries, we have set out which weights are attributed to the chosen products. The table below illustrates the products’ weights in situations following the first methodology. As previously explained, these shares do not hold when the cheapest product of the market is the incumbent’s product.
81 See General assumption (p.78)
82 (European commission, 2014)
83 (Stromvergleich, 2015)
84 In Germany, cities frequently provide their own energy product and they tend to have a large market share. While the 29,0%
indicates the market share that all the Stadtwerke have together in Germany. We take the assumption that this is also the % they have in the region when their product is taken into account.
When it is the case, it is assumed that such supplier has a 29% market share in the individual region.
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Table 31 : Profile weights depending on the German product
Product Weight E-RES Weight E-SSME
Standard product of the
market incumbent 44,90% 43,65%
Cheapest product on the market
10,20% 12,70%
Cheapest product of the market incumbent
44,90% 43,65%
The cheapest product was selected by using the German price comparison website, https://www.stromanbietervergleich.net/. The prices presented in the table below still integrate taxes (except VAT) and network costs because German suppliers use “all-in tariffs”. Furthermore, not all the selected products use different prices for peak and off-peak consumption. While this makes the comparison with other countries more complicated, it is deemed more important to choose the products according to the methodology. In Germany, this means that we took the cheapest product, of the market or the market incumbent, regardless of a dual price system or not.
FORBEG – A European comparison of electricity and natural gas prices for residential, small professional and large Table 32 : Annual cost of selected products for profile E-RES in German
Region Supplier - product Grundpreis (EUR/year)85
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Table 33 : Annual cost of selected products for profile E-SSME in Germany Region Supplier - product Grundpreis Arbeitspreis87
Peak
The commodity price could not be extracted through the comparing site for the E-BSME profile, and we have thus used a formula that was provided to us by the CREG89. The EEX Futures and EPEX DAM prices are the national indexes employed in the computation. We did not take the weekend hours of the EPEX SPOT DE DAM into account for the E-BSME profile. The CREG provided us with the formula. For 2021, ratios used in the formula were determined as being the average coefficients over three years (2016 to 2018).
Commodity price
= 36.5% H@I JKL+ 27.4% H@I JKQ+ 21.4% H@I JKR+ 8.2% T%KL+ 4.2% U%KL+ 2.3% 9Y9Z !"*) X9
87 Labour price (variable)
88 As no market share was found for this energy supplier no normalised market share could be computed. We have thus distributed the weights equally between Enqu en Vattenfall.
89 The formula is based on an analysis carried by the Belgian regulator of electricity supply contracts of all Belgian consumers with consumption higher than 10 GWh dating back to 2015.
FORBEG – A European comparison of electricity and natural gas prices for residential, small professional and large Where:
Explanation
CAL Y-1 Average year ahead forward price in 2020 CAL Y-2 Average two years ahead forward price in 2019 CAL Y-3 Average three years ahead forward price in 2018
Qi-1 Average quarter ahead forward price in the fourth quarter of 2020
Mi-1 Average month ahead forward price in December 2020