The Walloon government's recent political agreement outlines a comprehensive vision for the region's energy future. While this agreement is provisional and will be implemented through various legislative acts, it provides a clear indication of the government's intentions in the coming years.
The Walloon energy sector is on the brink of a significant transformation. Currently characterised by a fragmented distribution network with five distribution system operators (DSOs): AIEG, AIESH, ORES, RESA, and RESEAU D’ENERGIES DE WAVRE, the Region is poised to introduce a single distribution network operator. This is according to the political agreement sealed between the Mouvement Réformateur et the Engagés as part of the formation of the new government.
This new organisation aims to optimise the management of electricity, gas, heat, hydrogen, and CO2 networks, while accelerating the energy transition towards carbon neutrality by 2050.
Before diving into the proposed changes, it's essential to understand the existing structure of the Walloon electricity market. As regulated by the Directive 2019/344, the European electricity system involves several key players: producers, transmission System Operators (TSOs – in Belgium this role is played by Elia); distribution System Operators (DSOs) and, finally, suppliers.
Given their central and monopolistic position in the Walloon electricity and gas markets, electricity and gas distribution system operators and their subsidiaries are subject to strict regulatory oversight.
These rules ensure their governance, independence, and focus on their core business of managing distribution networks. The regulations cover aspects such as their legal form, their shareholder base, their activities (including a prohibition from engaging in certain activities, such as generation (except for their own installations), supply to end customers (except in specific cases), and holding shares in producers, suppliers, or intermediaries) or confidentiality.
These regulations aim to prevent discrimination in access to networks and the risk of cross-subsidisation between the monopolistic activity of managing the distribution network and other activities subject to competition.
According to the political agreement, by consolidating distribution operations under a single entity, the region aims to (i) improve efficiency: Streamline processes and reduce operational costs; (ii) enhance reliability: Ensure a more robust and resilient energy infrastructure; (iii) stimulate innovation: Create a more conducive environment for the development and deployment of new technologies, such as renewable energy sources and smart grids; (iv) facilitate consumer engagement: Empower consumers to play a more active role in the energy market.
The government will reform environmental permit legislation to streamline processes and align with sustainable development goals, including those outlined in the United Nations' Sustainable Development Goals (SDGs). A fast-track procedure will be introduced for priority economic sectors, such as renewable energy projects and energy efficiency initiatives. No further details have been provided at this stage. This change would need to be further examined as this would impact the development of energy projects in Wallonia.
The Walloon government wishes to introduce a more targeted approach to supporting renewable energy sources. This includes:
The implementation of these policies is likely to have significant implications for the Walloon energy sector. Key areas of impact include:
By creating a favorable regulatory environment for PPAs, the Walloon government can further incentivise the development of renewable energy projects and contribute to the region's energy transition goals.
The Walloon government's political agreement sets a clear path for the region's energy future. By focusing on efficiency, sustainability, and innovation, the government aims to position Wallonia as a leader in the energy transition. As these policies are implemented, we can expect to see significant changes in the Walloon energy landscape, including increased renewable energy generation, improved grid reliability, and reduced environmental impact.