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Belgium: scandalous pricing of electricity

While doing market research on fuel prices, I’ve come across a table by the Flemish Regulatory Body for the Electricity and Gas Market (VREG) that illustrates just how scandalous the pricing strategy of electricity is in Flanders (Belgium). The graph shows how the price per kWh for electricity has evolved over the past year. The three lines differentiate between large consumption (green), medium consumption (blue) and low consumption (orange). Low consumers have always paid more than medium and high consumers, but between February and March this difference has been inflated to more than double the amount of medium users. Single people who consume less than 600 kWh pay almost triple the rate of large families consuming 3900 kWh. This implies while cutting down on your energy consumption there is a point where your rate doubles, effectively nullifying your efforts and where higher consumption would be cheaper. One could argue this is because the fixed-cost usage of the power grid, but the VREG will raise those as well. This just proves that any environmental consideration in Flemish policy making is an illusion. #shameful

*update: I have reveived a response from the VREG, that adds valid arguments to this discussion (available if you continue reading). However, the response does not take away the argument that small consumers have seen a considerable hike in price/kWh. I am considering having an interview with them, after careful further research*

belgium-electricity-2016

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Cost of Energy: Belgium does it again

For quite a while, Belgian politics have been in turmoil over the cost of energy. You see, over the last years the local government has been oversubsidizing solar panels. When this was realized, the decision was taken that every household should pay an additional EUR 100, to pay for the mistake. This tax is still heavily debated and the sitting minister even had to resign. You’d think that some caution would be taken, to sooth the electorate. Think again. Yesterday, energy distribution company VREG (owner of the power grid) announced that it intends to start charging for the use of the lines based on capacity, rather than usage. In plain English: you will be charged according to what you could use, not what you actually use. In addition, the cheaper nightly rates will be abolished. Such a policy once again hits the most heavily taxed consumer (the single people) hardest en de-incentivizes austerity … the environment also takes a hit. To justify this policy change, nothing less than sorcery is used in the argumentation. Hold on to your hats: by switching to higher rates based on capacity, energy consumption will be spread over the day, requiring less investments in the grid and therefore lowering the rates. By paying more we will end up paying less. Sure, that is going to happen. What does the minister assigned to Energy (Bart Tommelein) and his party (OpenVLD) tweet as a response? “This is part of the jurisdiction of the independent regulator, minister and government cannot intervene”. #shameful

http://www.standaard.be/cnt/dmf20160622_02351504