Belgium - Energy: Natural Gas and LNG

Energy: Natural Gas and LNG

Last published date: 2024-01-11

This article covers both Natural Gas and Nuclear Energy sectors.

Natural Gas

Overview

Belgium’s Natural Gas and LNG sectors offer significant opportunities for U.S. companies looking to expand or enter the Belgian market. Key areas of focus include equipment supplies and services and LNG slots. Opportunities in those sectors are detailed below.

Belgium has made progress in increasing competition in its electricity and natural gas markets. It has reduced the use of fossil fuels and increased the share of renewable energy. The country’s economy is also becoming less energy intensive. Its National Energy and Climate Plan sets a 2030 target to reduce greenhouse gas emissions from the energy sector by 35 percent from 2005 levels, to reach 17.5 percent renewables in gross final energy consumption, and significantly reduce energy demand. Belgium has made progress on these goals. Coal-fired generation was phased out in 2016 and Belgium is a global leader in offshore wind, with 2.23 GW in 2020 and plans for 4.5 GW by 2030. That said, Belgium remains reliant on fossil fuels and is facing energy security challenges.

Opportunities

Subsidies for New Gas-Fired Power Plants Likely Approved by EU Soon

Belgian government contacts confirmed the European Commission (EC) is likely to formally approve Belgian plans to allocate over €350 million in subsidies to energy operators that want to build at least two new gas-fired power plants and invest in clean energy sources in Belgium. The EC had previously approved the scheme in September 2021, paving the way for Belgium to compensate for half of the nation’s electricity that would have been lost when all seven of Belgium’s nuclear plants were scheduled to go offline in 2025. Following the Russian invasion of Ukraine, however, Belgium agreed to prolong two of the seven nuclear plants through 2035, raising new questions of the legality of the state aid now that nuclear power will continue beyond 2025. Belgium has already authorized the construction of two new gas-fired power stations (to be operational in 2025) and has plans to release additional funds to encourage investment in energy storage technologies.

Significant Investments in Gas Transmission Network

The gas transmissions system operator (TSO)’s indicative investment plan for 2020-2029 aims for a total investment of EUR 644 million in the gas transmission network, the Zeebrugge LNG terminal and the Loenhout storage facility. The main elements of the plan are conversion of the L-gas (low-calorific gas) network to H-gas (high-calorific gas), infrastructure to support new gas-fired power stations expected because of the reduced nuclear production, the increase in LNG regasification capacity at the terminal in Zeebrugge, and the adaptation and modernization of the network. Significant opportunities for companies supplying equipment and services in the above fields are expected in the coming two years.

Additional LNG Slots in 2023

In December 2022 Fluxys LNG announced it will be offering 13 additional primary slots to unload, store and regasify 13 LNG cargo ships in the Zeebrugge LNG terminal in 2023. The company auctioned slots in early January 2023 and then 11 more throughout the year. The Zeebrugge terminal currently consists of five tanks with a storage capacity of 566,000 cbm and a regasification capacity of about 6.6 mtpa.

Leading Sub-Sectors

Without domestic natural gas production, Belgium imports natural gas via cross-border pipelines, subsea pipelines, and Belgium’s only LNG terminal located in Zeebrugge. Natural gas net imports are mainly from the Netherlands and Norway. L-gas produced in the Netherlands account for roughly one-fifth of Belgium’s gas supply. Belgian gas demand has fluctuated around 18 bcm over the past decade, led by industry, which accounted for approximately 40 percent of total gas demand, followed by electricity and heat generation, residential buildings, and service sector buildings. Gas demand in power generation is expected to increase in the coming years, as most of the nuclear plants will close.

Belgium maintains a high degree of natural gas supply security through a combination of several measures, including underground commercial gas storage and well-established safety standards of the supply infrastructure. Belgium’s natural gas emergency response policies are in line with European Union (EU) Regulation 2017/1938 concerning measures to safeguard the security of gas supply (“the SoS Regulation”).

Belgium’s well-developed and highly interconnected natural gas network supplies domestic gas demand and acts as a hub supporting flows between France, Germany, Luxembourg, the Netherlands, and the United Kingdom and to the broader European market. Belgium has two gas transmission systems: one for receiving, transporting and distributing L-gas, and another for H-gas. Belgium is in the process of converting its L-gas network to support H-gas, which is expected to be completed by 2024.

Networks: Transmission and Distribution

Belgium’s transmission networks are physically separate and operated independently from each other by the gas TSO Elia. Belgium’s combined H-gas and L-gas transmission networks are composed of 4,000 km. of high-pressure gas pipelines that supply gas directly to over 230 large industrial end users and power stations and over 70 receiving stations that supply Belgium’s gas distributions networks. The network has three main high-pressure pipelines to transport gas within Belgium and to neighboring countries. The VTN-RTR H-gas pipeline is bi-directional and runs from the interconnection with the United Kingdom and the Zeebrugge LNG terminal to interconnections with Germany and the Netherlands. The Segeo H-gas pipeline runs from the Netherlands to France. The Poppel-Blaregnies pipeline supplies L-gas from the Netherlands to Belgium and France.

Belgium’s distribution network is also composed of separate distribution networks for L-gas and H-gas with medium- and low-pressure pipelines and serves most gas consumers in the residential, commercial, and small and medium-sized industrial sectors. Belgium’s gas distribution system had around 2.7 million connection points. The country’s municipalities have a legal monopoly on gas and electricity distribution and own the gas and electricity distribution networks. Nearly all municipalities have transferred responsibility for the operation of the gas and electricity distribution networks to intermunicipal companies, which are the distribution system operators (DSO) for the assigned section of the gas distribution network. In 2023, there were 17 DSOs in Belgium, with 11 in Flanders; five in Wallonia, where ORES and RESA serve most of the region; and one in the Brussels Capital Region.

LNG Terminals and Interconnections

The Belgian transmission grid has a high level of interconnectivity with adjacent transmission grids, offering extensive access to the Northwest European market and its production facilities. Belgium has 17 cross-border pipeline interconnection points, with 13 serving the H-gas network and four serving the L-gas network. The H-gas interconnections supply domestic H-gas demand and transit H-gas regionally and to the broader European market. The Alveringem interconnection point is the most recent H-gas interconnection (commissioned in 2015) and connects Belgium’s H-gas network to the LNG terminal in Dunkirk, France. The L-gas interconnections supply domestic L-gas demand and transit L-gas to France.

Belgium has one LNG terminal operated by Fluxys LNG located in the Port of Zeebrugge, which supplies Belgium and the European market with H-gas. Fluxys is considering increasing the Zeebrugge Terminal regasification capacity. The Indicative Investment Plan of Fluxys Belgium and Fluxys LNG 2021-2030 expects construction of new regasification capacity to increase the stand-alone send out capacity to 8.2 gigawatt hours per hour (GWh/h) and then up to 10.5 GWh/h. The final investment decision for the increased stand-alone send out capacity was taken by Fluxys LNG in February 2021; the commissioning of the first step is expected early 2024 and the commissioning of the second step early 2026.

Fluxys decided to build four additional bays last year due to the sharp increase in demand for LNG as fuel for trucks and ships. It also started offering bio-LNG services at the plant.

Belgium has one underground natural gas storage facility connected with the H-gas transmissions system in Loenhout. The facility is also operated by Fluxys Belgium and can be used by any gas supplier. It has a maximum storage capacity of 680 mcm, a maximum injection capacity of 7.8 mcm per day and a maximum withdrawal capacity of 15.0 mcm per day. The facility is used for seasonal gas storage and is highly flexible. Considering that annual gas consumption was 18.5 bcm in 2019, the gas storage facility can cover the equivalent of around 13 days of Belgium’s average gas demand. Short-term gas storage is also available at the Zeebrugge LNG terminal, which has a capacity of around 347 mcm of natural gas.

The Loenhout storage facility gives suppliers a flexible source of natural gas and allows them to ensure the continuity of deliveries to end users. Belgium does not have any storage for L-gas, other than line-pack. Currently, Belgium uses the Dutch L-gas fields as swing supplier to provide flexibility in L-gas supply.

Doing Business in Belgium’s Natural Gas and LNG Sector

The energy sector in Belgium is shaped by the policies of its national and regional governments as well as the European Union. The monitoring of the electricity and natural gas market happens on three regional levels, the Brussels-capital region, the Flemish region, and the Walloon region.

In terms of procurement opportunities, the Federal Public Service Policy and Support (BOSA) advises and supports public services on public procurement. BOSA offers a range of framework agreements for purchases and by giving advice on the regulations on this subject. It is also responsible for the management, development, and maintenance of the e-Procurement platform, where procurement of federal, regional, and local authorities can be found. U.S. companies should pursue private sector tender opportunities directly with those companies.

Although U.S. exporters are not required to appoint a local agent or distributor to sell to Belgian companies, it is strongly recommended that companies consider partnering with a local company for the purposes of monitoring business opportunities, navigating import and standard testing regulations, and identifying public sector sales and contract opportunities. The U.S. Commercial Service in Brussels can advise U.S. companies find local partners.

Resources

Ministry of Energy: The Belgian federal government is responsible for nuclear power plants, energy supplies and offshore wind turbines. The regions of Flanders, Brussels and Wallonia are responsible for wind energy on land, solar energy, distribution of gas and electricity at lower voltage.
Federal Public Service Policy and Support (BOSA): advises and supports public services on public procurement.
Commission for Electricity and Gas Regulation (CREG): the Belgian Federal Commission for Electricity and Gas Regulation. It is an autonomous organisation granted with legal personality, set up by the Electricity and Gas Laws.
VREG: the Flemish regulator, the Flemish Regulator of the Electricity and Gas market
Walloon Energy Commission (CWaPE): the Walloon regulator
Brussels Gas Electricity (BRUGEL): the Brussels regulator
Engie Electrabel: the main utility and electricity producer in Belgium
EDF: the second-largest utility and electricity producer in Belgium
Luminus: the third-largest utility and electricity producer in Belgium
Elia: Belgium’s Transmission Systems Operator for high-voltage electricity
Fluxys: Belgium’s Transmission Systems Operator for gas and operator of the Zeebrugge LNG Terminal

For more information on the Belgian energy sector, contact Commercial Specialist Stéphane Croigny at stephane.croigny@trade.gov.

Nuclear Energy

Overview

There are significant opportunities to come for U.S. companies in the nuclear energy sector in Belgium, including in the supply of equipment for the refurbishing of Belgium’s nuclear power plants, partnerships with Belgium’s nuclear energy research institute, and Small Modular Reactors (SMRs).

Belgium currently has seven nuclear reactors generating about half of its electricity (4936 MWe of installed power). Belgium’s first commercial nuclear power reactor began operating in 1974. The country also operates a research reactor at the Belgian Nuclear Research Center (SCK CEN). Nuclear power is an important source of Belgium’s energy even though its relative share in the country’s energy mix is tending to decline in favor of gas and renewables. Nuclear power in Belgium generates 2,000 direct jobs and 2,500 indirect jobs, two million hours of subcontracted work (on average per year), and more than 100 million euros in annual investments.

In 2003, the Belgian government passed a nuclear phase-out law which prohibited the building of new nuclear power plants and limited the operating lifetimes of existing ones to 40 years. The law can be overridden by a recommendation from the electricity and gas regulator (CREG) if Belgium’s security of supply is threatened. In 2015, parliament passed a new legislation to enable 10-year lifetime extensions for the two oldest reactors to 2025, thus overturning a major provision of the 2003 law. In November 2017, three major Belgian business associations – Essenscia, Agoria, and Febeliec – said that shutting all nuclear plants by 2025 was not affordable, and that the plan would boost carbon dioxide emissions and damage Belgian businesses. In June 2023, Belgium reached an agreement with operator Engie to extend the use of the country’s nuclear reactors by 10 years after Russia’s invasion of Ukraine prompted Belgium’s governing coalition to rethink plans to rely more on natural gas. Belgium was to have exited nuclear power entirely by 2025 but will now extend the lives of its two newest reactors, Doel 4 and Tihange 3, according to the agreement. The accord with the French utility also set a price for future nuclear waste management costs, of 15 billion euros ($16 billion). Based on current nuclear provisions, Engie’s total nuclear liabilities to Belgium now amount to at least 23 billion euros. The agreement also included creating a 50:50 joint venture to manage the units.

Policy related to the nuclear sector, the nuclear fuel cycle, and nuclear R&D in both nuclear fusion and fission falls under the responsibility of the Federal Ministry of Energy

Opportunities

Over $1 Billion of Investment Expected in Hydrogen, SMRs and Renewables: Belgian authorities confirmed in March 2022 plans to keep two of Belgium’s seven nuclear reactors operating for at least ten more years - through 2035 - while announcing a $100 million in new investments in SMR technologies, as well as a $1.16 billion package to develop offshore wind power, hydrogen, and solar energy.

Maintenance: given that the Belgian government has decided to extend the life of two of its newest nuclear reactors, there are opportunities in maintenance and upgrade equipment. It is expected that Engie Electrabel will announce investments in equipment upgrades worth several million euros over a period of two years.

Decommissioning: Under the current law, all nuclear reactors should be decommissioned by 2035. If the Belgian law is not further revised one expects significant opportunities in decommissioning services and equipment in the years ahead.

Leading Sub-Sector: Small Modular Reactors (SMRs)

Belgium reversed its plans to completely phase-out nuclear energy for electricity production in March 2022, and now must address recent reports that its energy supply will be lower than anticipated in 2025-26 and potentially this winter if pipeline gas imports from the UK are shut-off due to prolonged sub-zero temperatures.

Development of advanced nuclear power technologies, including SMRs

Since 1998, SCK CEN has been developing the nuclear research infrastructure Multipurpose Hybrid Research Reactor for High Tech Applications (MYRRHA), based on the concept of an accelerator driven system for the necessary research into innovative solutions for high level radioactive waste, the qualification of fusion reactor materials and fundamental nuclear physics research. One of MYRRHA’s long term objectives is to investigate transmutation of high-level radioactive waste. Transmutation aims to reduce its long-term radiotoxicity by a factor of 1 000 and to shorten its radiotoxicity timeframe from 300 000 to 300 years, which is a timeframe that can be technologically controlled and offers a real benefit in terms of both safety and economic cost.

The MYRRHA project consists of three phases: Phase 1 is the design and construction of the 100 megaelectron volt linear accelerator and its experimental stations, which will be able to function independently from 2026. Phase 2 consists of the extension of the first linear accelerator to 600 megaelectron volt. This extension would be required to drive the subcritical reactor and could be completed in 2033. Finally, Phase 3 is the construction of the subcritical reactor, which could be commissioned in 2036. In September 2018, Belgium’s federal Government committed to finance Phase 1 of the project for an amount of 558 million, which includes R&D to prepare for Phase 2 and pre-licensing of the subcritical reactor. An international non-profit organization has been set up to invite international partners into this project. A decision on Phases 2 and 3 will be taken in 2026.

MYRRHA is included in the European Strategy Forum on Research Infrastructures (ESFRI) roadmap and the European Sustainable Nuclear Industrial Initiative (ESNII) of the Sustainable Nuclear Energy Technology Platform (SNETP) in support of the European Strategic Energy Technology Plan (SET Plan). MYRRHA will be a subcritical assembly driven by a high-power proton accelerator that generates the primary neutrons by means of spallation reactions in the center of the core to trigger fission reactions in the subcritical core. As well as being able to produce radioisotopes, MYRRHA’s research functions would be particularly well suited to investigate transmutation and to demonstrate the efficient operation of the concept of an accelerator driven system at a pre-industrial scale. Transmutation of long-lived radioactive substances into less toxic, shorter lived radioactive substances could offer an opportunity to optimize geological disposal.

In May 2022, the Belgian federal government announced that the SCK-CEN nuclear research center will receive a budget of EUR100 million (USD107 million) from the federal government to conduct SMR research. The government is making EUR25 million available per year for research on fourth generation SMRs for a period of four years. The government wants the funding to be used to research SMRs that do not use water as a coolant. A liquid metal - sodium or lead - or a gas must cool the reactor core. If Belgium chooses to explore lead cooled SMRs, it could benefit from the development pathway of the Myrrha reactor. Although Myrrha is not an SMR, it shares some principles, such as compactness, the coolant, and thus fast neutrons.

Although there is still a lot of research to be done before Belgium can build its first SMR, the Belgian government and SCK-CEN have identified international cooperation - both on a scientific and on an industrial level - as an absolute necessity. U.S. companies and institutions active in the field of SMRs are therefore encouraged to seek partnerships with SCK-CEN and other key stakeholders in Belgium’s nuclear sector.

Doing Business in Belgium’s Nuclear Energy and SMR Sector

In terms of procurement opportunities, the FPS Policy and Support (BOSA) advises and supports public services on public procurement. BOSA offers a range of framework agreements for purchases and by giving advice on the regulations on this subject. It is also responsible for the management, development, and maintenance of the e-Procurement platform, where procurement of federal, regional and local authorities can be found. U.S. companies should pursue private sector tender opportunities directly with those companies.

Resources

Ministry of Energy or FPS, SMEs, Self-Employed and Energy: The Belgian federal government is responsible for nuclear power plants, energy supplies and offshore wind turbines. The regions of Flanders, Brussels and Wallonia are responsible for wind energy on land, solar energy, distribution of gas and electricity at lower voltage.
FPS Policy and Support (BOSA) advises and supports public services on public procurement.
CREG regulates and licenses electricity transmission above 70 kV, approves transmission tariffs and monitors the market.
ELIA is Belgium’s TSO for electricity.
FANC/AFCN (Federal Nuclear Regulator): Licensing, control and surveillance are the responsibility of the Federal Agency for Nuclear Control (FANC/AFCN), which is supervised by the Minister for the Interior. The FANC/AFCN has legal duties in the field of radiation protection, nuclear safety and radiological surveillance, licensing and de-licensing.
ONDRAF/NIRAS is entrusted by law with the safe transportation, treatment, conditioning, storage and disposal of all radioactive waste produced in the country under supervision of the Minister of Energy and the Minister of the Economy. The legislature also assigned certain responsibilities in the field of decommissioning to ONDRAF/NIRAS; it sees to it that the owners/operators create the necessary provisions for the financing of the future dismantling program. ONDRAF/NIRAS must work at cost price and charge those using its services radioactive waste producers no more or less than the amounts necessary to ensure the safe management of their waste, in accordance with the polluter pays principle. ONDRAF/NIRAS also has the main responsibility for R&D on radioactive waste management and its disposal.
Synatom: a wholly owned subsidiary of Engie Electrabel, is responsible for the fuel cycle front end management (i.e., supplying enriched uranium to the seven nuclear power units) as well as the fuel cycle back-end management (i.e., the management of all activities in connection with spent nuclear fuel). Synatom is the exclusive owner (as defined by EURATOM Treaty Article 87) of the nuclear fuel from its fabrication to its transfer to the National Agency for Radioactive Waste and Fissile Materials (ONDRAF/NIRAS) when declared as radioactive waste. Hence, it is the most important owner and producer of irradiated fissile materials. In addition, Synatom is entrusted by law with the management of the provisions for dismantling Belgium’s NPPs and for the costs related to their spent fuel.
Belgoprocess; Since 1986, ONDRAF/NIRAS has had an industrial subsidiary, Belgoprocess, whose site in Dessel serves as ONDRAF/NIRAS’s central processing and conditioning facility as well as a storage facility for conditioned waste of all categories. Belgoprocess is active in the following three areas 1) Industrial activities in the field of radioactive waste management (processing, conditioning and intermediate storage awaiting the final disposal of radioactive waste), 2) Dismantling of decommissioned nuclear plants, remediation of contaminated buildings and sites, decontamination of materials and structures, 3) Retention and development of new knowledge and know-how, execution of projects and commercial use of the know-how within these areas.
SCK-CEN (Belgian Nuclear Research Center): As a foundation of public utility, SCK CEN conducts research into the safety of nuclear installations, the management of radioactive waste and human and environmental protection against ionizing radiation, safeguards of strategic materials and the social implications of nuclear energy.
IRE: The National Institute for Radioelements (IRE) is a public utility foundation whose main activity is the production of radioelements used in nuclear medicine for diagnostic and therapeutic purposes. Its R&D department contributes to research in the field of radioelement production, environmental protection and radioactive waste management.

For more information on the Belgian nuclear sector, contact Commercial Specialist Stéphane Croigny at stephane.croigny@trade.gov

1 Source: Wikipedia.org