Power allocation within Federal Belgium with regards to demand-side flexibility: review of a recent DemandFlex publication

♦ 4 min read  ♦ Marie Beudels

Belgium is a federal country. This means that some (legislative and executive) competences have been transferred to the Belgian federated entities of Belgium (the Communities and the Regions). When it comes to energy matters, the energy-related competences have been divided between the federal government and the regions (Flanders, Wallonia and the Brussels region).

More precisely, the special law on institutional reforms, which, amongst others, allocates competences to the regions indicates in its article 6, para. 1, VII, that the regions are competent for the “regional aspects of energy” while the federal government stays competent for “matters whose technical and economic indivisibility requires uniform implementation at national level”. This provision further provides examples of the regional and federal competences. The regional aspects of energy include, amongst other, the distribution and the regional transmission of electricity (voltage equal or under 70,000 volts), the distribution of gas, the electricity and gas distribution network tariffs, the new sources of energy and the rational use of energy. On the other hand, the federal competences include the nuclear energy, the large storage infrastructures, the transport and production of energy, and the energy rates (including the pricing policy). Most of this provision was established in the 80s. Today’s context of energy transition has however given rise to technical and economic innovations in the energy sector that were not necessarily envisaged at the time.

In a recent publication, Marie Beudels, Ph.D. candidate in the framework of the DemandFlex project, has analysed article 6, para. 1, VII of the special law on institutional reforms and how it is interpreted in the wake of these new developments in the energy sector. Taking hydrogen as a case study – a new federal law on the transport of hydrogen was adopted on 11 July 2023 – she argues that the Constitutional Court and the legislative section of the Belgian Council of State tend to solve questions relating the power allocation in energy-matters using only the items listed in article 6, para 1, VII of the special law on institutional reforms, which they interpret broadly. In other words, they do not apply what she analyses as the principles of the power allocation in energy, namely that the regions are competent for the regional aspects of energy and the federal government, for the national aspects. Her contribution aims at showing that, in doing so, this interpretation of the power allocation in energy matters leads to a lack of predictability and a lack of consistency in the interpretation of the power allocation in energy matters. To avoid these pitfalls, she advocates a novel approach in the interpretation of the article 6, para 1, VII of the special law on institutional reforms, which is more holistic. Under this approach, if a new energy question cannot be linked with one of the items listed in this provision, the interpreter should rely on the principles of the power allocation in energy matters to decide which level of government is competent, principles according to which the regions are competent for the regional aspects of energy and the federal government, for the national aspects.

When the power allocation is applied to demand-side flexibility, the observations made in the article are still valid. When it has analysed the competence of the federal government for demand-side flexibility procured by the TSO, the Belgian constitutional Court has linked this question with the competence of the federal government for the “transport [read transmission] of energy”, an item listed in article 6, para 1, VII of the special law on institutional reform (Decision 56/2016 of 28 April 2016). At the same time, the Flemish government has attacked a recent federal law, amongst other because this law gives rights to the so-called “active customer” (which includes the flexible customer) and the Flemish government considers that it is competent for all customers connected at the distribution level, including the active ones, based on its competence for the distribution of electricity, an item listed in article 6, para 1, VII of the special law on institutional reform. So, both levels of government consider themselves competent for some parts of demand-side flexibility, which could lead to having several legislations covering the same situation, maybe with a different content, while the case-law on the power allocation on energy matters could, in its current state, support both interpretations.

Under the holistic approach of the power allocation in energy matters, by contrast, the question would not be “is the client connected at transmission or distribution level?” but rather “is this flexibility a regional or national aspect of energy?”. When it comes to flexibility procured to the TSO for balancing purposes, it can be argued that as the balancing zone is national and the balancing market is a national market, such flexibility is a national aspect of energy. On the other hand, if at some point flexibility will be procured by the DSO for the purpose of congestion management on the distribution grid, it could be argued that such flexibility is a regional aspect of energy. It does not matter, in this respect, whether the flexibility is proposed by customers connected at the distribution or transmission level.

Yet, the current interpret does not follow the proposition presented in the contribution. The pitfalls of lack of predictability and lack of coherence are therefore still present. Whether with respect to demand-side flexibility or other news considerations in the energy sector, both regions and federal government are responding to the legal uncertainty created by the lack of clarity on the power allocation by trying to de facto occupy the field, which may delay the adoption of a legal framework supportive of the energy transition. A gradual move towards the proposed holistic interpretation could increase predictability and consistency and thus avoid wasting time.