Commissions approves amendments to the Belgian capacity mechanism state aid scheme

The European Commission has approved, under EU state aid rules, amendments to the Belgian capacity mechanism. The Commission approved the Belgian capacity mechanism in August 2021 and its first modification in September 2023. The measure aims to ensure that there is sufficient capacity to produce, store or flexibly consume electricity and that electricity production meets the expected demand.  

Belgium notified to the Commission its intention to amend the scheme in order to improve its functioning and contribution to environmental protection. These modifications include: (i) supporting the development of storage and demand-response by improving the beneficiaries' contractual conditions; (ii) introducing a new Y-2 auction organised two years before the delivery year (which is the period over which the beneficiaries commit to be available for security of electricity supply) to facilitate the participation of electric storage operators to the measure; and (iii) facilitating competition between various technologies by promoting investments in the prolongation of the existing capacity, and investments in new non-fossil flexibilities such as demand-response and storage. The modified scheme will run until 2031.

The Commission assessed the amendments under EU State aid rules, in particular under Article 107(3)(c) of the Treaty on the Functioning of the European Union, which enables member states to support the development of certain economic activities subject to certain conditions, and the 2022 Guidelines on state aid for climate, environmental protection and energy. The Commission found that the amendments are necessary and appropriate to achieve the objective pursued, namely to make the Belgian capacity mechanism more environmentally friendly. In addition, the Commission found that the amended scheme continues to be proportionate, as it improves the competition between technologies participating to the capacity mechanism while also taking into account the Belgian climate goals. On this basis, the Commission approved the amendments under EU State aid rules.

The non-confidential version of the decision will be made available under the number SA.114003 in the in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

Share this article: