13 December 2019

The Walloon Region recently became the first entity in the country to transpose in detail the Renewable Energy Directive. The centrepiece of the Walloon decree is the concept of a renewable energy community, whose purpose is to share electricity via the public or local distribution network. In addition to the rules regarding renewable energy communities, the legislator wanted to clarify the conditions for granting authorisation for direct lines and to make these conditions more flexible.

Context

A decree of the Walloon Parliament was recently published in the Belgian Official Journal to introduce the concept of a renewable energy community into Walloon law. The Walloon Region was thus the first legislator in the country to transpose in detail the Renewable Energy Directive (Directive (EU) 2018/2001 of 11 December 2018 on the promotion of the use of energy from renewable sources – see also Eubelius Spotlights March 2019).

In practical terms, the Directive has several parts, which aim to define a common framework for the promotion of energy production from renewable sources (Article 1 of the Directive). Among other principles, the Directive is based on the right of self-consumption of renewable energy and the concept of a "renewable energy community".

The Directive provides several rules promoting the proper functioning of the right of self-consumption of renewable energy and renewable energy communities. The regional legislator transposed these rules by adopting the decree of 2 May 2019 (Belgian Official Gazette 13 September 2019).  

The Walloon Parliament also took the opportunity to clarify the rules applicable to direct lines and, to a certain extent, to make them more flexible.

Definitions

The decree defines the concepts of "renewable energy community", "collectively self-consumed electricity" and "local perimeter". Without going into too much detail, it is important to analyse the constituent parts of these different concepts.

A renewable energy community (hereinafter "REC") has several characteristics:

  • Its purpose is to share electricity via the public or local distribution network.
  • Electricity shared within the REC must be produced exclusively from renewable energy sources or quality cogeneration, by production and, where applicable, storage units held by the REC.
  • The primary goal of the REC is to provide environmental, economic or social benefits to its participants rather than to seek profit.
  • The REC operates within a "local perimeter".

The local perimeter is defined by the location of the connection points:

  • The removal or injection connection points are located downstream of one or more public medium and/or low voltage electricity transformation substations.
  • The connection points must be located within a geographical perimeter that mobilises the technically, socially, environmentally and economically optimal portion of the network in order to promote local collective self-consumption of electricity.

Collectively self-consumed electricity is the electricity produced by the renewable energy community and consumed by its participants during the same quarter-hour period.

Rules on the renewable energy community

The decree exempts RECs from having to have a licence to supply electricity for collectively self-consumed electricity within the REC. This reduces the administrative burden that can be placed on the REC and thus promotes the development of RECs. However, this only applies to electricity that is collectively self-consumed within the REC. This seems to mean that the legislator wants to encourage RECs not to produce electricity for supply outside the REC. 

The regional legislator adopted rules allowing the REC to operate properly. These rules concern, among other things, the persons who are authorised to participate in the REC ("any natural person, local authority or small or medium company located in a local perimeter can participate in a renewable energy community"; large companies are therefore excluded), the representation of its participants, the relationships between the REC and its participants, the statutes of an REC, and the possibility of delegating the management of the REC to a person who will become the sole contact person.

In particular, the decree states that participants in the REC must conclude an agreement with the REC setting out the rights and obligations of the participants towards the REC and vice versa. The legislator delegated to the Walloon Government the power to specify the minimum content of the agreement, after consulting the CWaPE (the Walloon Energy Commission). Participants in an REC therefore benefit from some protection.

What about the public distribution network?

The REC is an entity that has the potential to affect the security of the public distribution network and the economic interests of its system operator. Therefore, the creation of an REC is subject to a prior authorisation issued by the CWaPE, following a detailed technical opinion from the system operator. That is why the legislator has provided that the thresholds for collective self-consumption are to be set by the CWaPE.

The decree prohibits the distribution system operator from directly or indirectly having holdings in the capital of renewable energy communities. In doing so, the legislator has sought to guarantee the autonomous existence of renewable energy communities vis-à-vis these system operators.

Similarly, several provisions are intended to ensure that system operators promote the development of RECs under transparent and non-discriminatory conditions, while specifying that system operators must analyse the volumes of electricity distributed on their network. Each system operator must carry out a triennial technical analysis of the impacts of the various collective self-consumption operations.

A pricing methodology is also provided for the system operators' services to RECs. This is to ensure that REC participants are not free-riders who could use the public distribution network without financial intervention, and to ensure that there is a contribution to the overall costs of the network. However, according to the decree, the pricing must also allow the development of RECs.

Finally, REC participants retain the rights and obligations stemming from their status as network users and are treated in a non-discriminatory manner in relation to network users. This is important because it provides sufficient protection for these participants in case of an REC's malfunction.

Modifications for direct lines and closed professional networks

The decree also includes several rules relating to direct lines and closed professional networks. Among other things, the construction of direct lines is facilitated (for electricity and for gas): the applicant no longer has to be confronted with a refusal of access to the network or the lack of an offer to use the network under reasonable economic and technical conditions. It will definitely be easier for the CWaPE to issue an authorisation for the construction of direct lines (for electricity and gas).

The legislator also wanted to avoid RECs being considered as direct lines or closed professional networks: the conditions for authorising such projects therefore remain strict. In order to ensure that the development of RECs is not limited by these conditions, the regional legislator has delegated the competence to the Government to specify situations that do not correspond to a closed professional network or a direct line.