Speech – Bezoek Kamer van Koophandel Milaan

I would first of all like to thank you for the invitation.

The world of energy is a world full of challenges, big challenges.

Flanders is facing an energy transition, a new era.

And this requires a vision, a long-term vision. My ambition is not just to conduct a policy for the present term of office which runs until May 2019. Today, we must lay the foundations for what is coming in 2030, 2050.

Flanders too is working on a long-term energy vision, since an energy policy requires projections that reach beyond the present term of office.

Flanders’ vision will be partially steered by the targets imposed by the European Commission with regard to renewable energy, CO2 reduction and energy efficiency. The imposed targets necessitate adaptations throughout our energy system: to the energy demand, energy supply, infrastructure, regulatory framework, markets, aid mechanisms, etc. These adaptations are intended to keep our energy system reliable and competitive, as well as to make it more environment-friendly and sustainable. We want to achieve this in a socially and economically responsible manner.

A few moments ago, I was talking about a world full of challenges. The first challenge is a healthy, stable investment climate which will lead to more renewable energy in a cost-efficient manner. This is a difficult exercise, since we do not want to meet our target for renewable energy through oversubsidisation. On the contrary. Through market-conform aid, we want to be able to offer our children and grandchildren a new, sustainable and low carbon energy landscape, without making them pay for the additional costs. In the past Flanders has made the mistake of oversubsidising solar panels in particular by means of green certificates. This aid was not directly charged. As a result, Flanders has incurred a huge debt, which will amount to 12 billion euros by the end of this term of office (in 2019) and will have to be included in the energy bill.

It is a difficult balancing exercise: giving sufficient aid to promote investments in renewable energy without increasing the pressure on the bill for companies and citizens. I closely monitor the calculation of the aid for renewable energy. The trend is clear: renewable energy has reached maturity, which means that the aid can be reduced sensibly. Sensibly, because these solar panels are installed by companies. Cutting back on the aid too abruptly could jeopardise an industry and threaten jobs. This must be avoided as well.

Flanders does not have any hydroelectric power plants. Our renewable energy is generated by means of onshore wind, solar panels and biomass. However, we have not yet reached our target. Our European target is set at 13% of renewable energy with respect to the gross end use of energy. The internal burden sharing has not yet been realised in Belgium, but in Flanders we are getting nearer to a 10.5% share.

I would like to reach 10.5% of renewable energy in the end use. This is not an easy task, yet I would still like to realise it. It is not just good for the environment, but also for the security of supply in Flanders. The news about the underestimation of the number of cracks in the nuclear plants Doel 3 and Tihange 2 is not particularly reassuring when it comes to restarting these two units. That is why I want to take forward-looking action. The realisation of the renewable energy target should result in a healthy energy mix, as well as improve the security of supply in Flanders and make it more reliable. Currently, we only realise 5.9% of renewable energy in the gross end use of energy. We need to increase this to 10.5%, so there is still a great deal to be done! In order to make the right choices, I also like looking across the borders to see how countries like Germany are tackling this.

Flanders currently has 300 wind turbines. If we are to meet our target, we will have to install another 1,000. For this reason, I would like to develop a green lane in Flanders with sites where it is logical to install wind turbines, for instance along  line infrastructure, in port areas and on large industrial estates.

Until now, I have mainly focused on renewable energy and the realisation of the European target. However, another pillar of my policy is at least as important. As Minister for Energy I fully engage in energy efficiency. I try to encourage people to save energy in every possible way. Both companies and private individuals, since the same applies to everyone: the only kilowatt hour that is free, is the one you do not use. And there is still a gigantic number of kilowatt hours we can save.

It is true that a European target has been set with regard to energy efficiency. Still, this is not the only reason why we should do it. Saving energy is an essential component of the energy transition Flanders is faced with. We are working hard on the private market to encourage people to install insulation, to live and work in a more energy-efficient way, which will automatically lead to greater comfort, etc.

Research by the Flemish Energy Agency clearly shows that the average energy performance of the existing Flemish housing stock is poor. Very poor even.

300,000 houses in Flanders are of poor quality. 19% of the houses in Flanders do not yet have roof or attic-floor insulation, the windows of 12% of the houses are still single-glazed, etc… We let heat escape; money is literally going up in the air.

This is the second major pillar of my policy: I want to turn Flanders into an energy-efficient region. And I have already developed a number of tools for this purpose:

the energy loan, a reformed subsidy system, and the Renovation Pact, for which we have found more than 30 partners who are willing to look with us for ways of supporting the Flemish people and encouraging them to renovate in an energy-efficient manner.

As far as the business community, both large and small enterprises, is concerned I firmly believe in third-party financing. ESCOs may help Flemish companies to become more energy-efficient. For this as well, we are currently consulting with all possible stakeholders.

In our region we have 1 big biomass power plants, two others are planned. In addition there are also 23 small biomass and biogas installations. At this moment, the electricity from the biogas installations can be delivered to 200 000 households.

During September I’ll organize a call for projects to subsidize CNG (compressed natural gaz) as fuel to cars. In 2013 we only had 310 cars on CNG, in 2014 the number had already risen to 562. The situation in Flanders is that there are 1,5 million cars on gasoline and 2,5 million on diesel. CNG has a lot of benefits: 27% less of CO2, 95% less of harmful particles.

Our region is characterized as agricultural intensive, so we have a lot of manure, the goal is to turn it into biogas.

Just like the weather, this story does not end at the border. Europe would like us to invest, and preferably in projects that benefit several countries. “Gladly” is my answer to that. In fact, every investment in energy is an investment that benefits the whole of Europe.  And what about interconnections? Europe’s energy production is sufficient to cover the whole continent.  More than sufficient. We must make sure that it can be shared.

Europe has its targets. Ambitious targets in the field of renewable energy and energy efficiency. These targets offer opportunities, but also pose very significant challenges, including for energy-intensive companies. We must also reach out to our companies in Flanders which, through energy policy agreements, make a deal with the government to work in a very energy-efficient manner. We have to make sure that they are not at a competitive disadvantage because they have to comply with these targets. Again, we must enter into a dialogue with the European Commission, as the loss of these companies would also result in job loss.

During this term of office I will also introduce an energy standard for energy-intensive companies. This has been laid down in the Flemish Coalition Agreement. This standard is to make sure that the sum of the additional costs and net tariffs is not higher than in neighbouring countries.

In order to lower energy bills, the Government of Flanders, along with the federal government, will unambiguously compare all components of the additional costs of gas and electricity that apply to industrial consumers with those charged in other relevant countries and regions.

This is first and foremost aimed at safeguarding the competitiveness of our companies. If it would turn out that the additional costs and net tariffs are higher than in our main neighbouring countries, it will have to be examined for the different components which action can be taken in order to eliminate this difference as soon as possible.

 

Ladies and gentlemen,

The government needs entrepreneurship and innovation. These are the levers for sustainable solutions regarding energy, environment, etc. For this reason, the Government of Flanders will make targeted investments in research and development on renewable energy and energy efficiency.

This research and entrepreneurship in Flanders will lead to deep geothermy, a project which is no longer in its infancy in Germany. In Flanders, the first careful steps into drilling are taken by two players: Janssens Pharmaceutica, on the one hand, and VITO, which is the Flemish Institute for Technological Research, on the other. We aim to support this technology and have therefore recently decided to include deep geothermy in the call for green heating. The Government of Flanders wants these projects to have every chance of success.

Apart from providing aid, the government should also offer security to entrepreneurship in general.

Security of supply is one of the main pillars of a long-term vision. In addition to energy efficiency, and transformation, storage, transport, production, an adjusted net infrastructure, smart meters, etc. This will take a lot of work, but will also create work.

In short, the energy transition in Flanders is gathering momentum.

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