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Belgium unplugged

Once again, Belgium faces a power supply crunch in the coming months. The country’s security of supply is threatened, which negatively affects Belgium’s competitiveness. A coherent, reliable and long-term energy strategy is urgently needed to keep the lights on and business running.

Belgium has been scrambling to find the necessary power supply for the coming winter months. The country risked facing an energy shortage as almost all nuclear reactors were scheduled for repairs in the upcoming months. Nuclear power supplies about half of Belgium’s electricity needs.

The concerns have been addressed by importing energy from France and postponing the maintenance of the Tihange 1 reactor. The risk of blackouts has now diminished, but the problem, a recurring problem, goes beyond this short-term concern.

It is not the first time Belgium has suffered from an energy supply shortage, and without taking action to find solutions, it won’t be the last time. Moreover, the unstable and unpredictable power supply is a serious handicap for Belgium’s competitiveness. With high costs of energy and persisting uncertainties, Belgium is at a competitive disadvantage vis-à-vis its neighbors and risks losing investments.

As a result of increased demand and the risk of insufficient supply, the wholesale price of power soared, making Belgium even more expensive compared to neighboring countries – a price difference of between 10 and 34%. Moreover, the higher energy prices will also affect the automatic wage indexation, increasing the labor cost: another competitive disadvantage for companies located in Belgium.

Belgium’s energy ecosystem brings significant risks and costs for businesses due to multi-level governance and ever-changing policies. The responsibility for energy in Belgium is split between the federal and regional levels. This regionalization has increased the complexity of energy management and has produced incoherencies between several policies.

The economic impact of power blackouts must not be underestimated. The current situation is another reminder for the need of a coherent, reliable and long-term strategy to address the looming energy crisis and ensure households and industrial consumers can access  an adequate, cost-competitive and sustainable power supply in the future.

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