JEL classification

Increasing interconnections: to build or not to build, that is (one of) the question(s) - Addendum to the cost-benefit analysis of adequate future power policy scenarios [28/09/2017]

At the request of the federal Minister of Energy, this report was carried out as a follow-up on the cost-benefit analysis published by the Federal Planning Bureau in February 2017. It constitutes an addendum to the February study in that some additional questions impacting the Belgian production park are scrutinized in detail. Four topics are dealt with. The first one concerns the impact of an increase in the Belgian cross-border transfer capacity by 2 GW on the functioning of the domestic flexible thermal park. The effect this will cause on the full load hours, the system marginal cost, CO₂ emissions, the required volumes of natural gas and employment is studied. Second, the report assesses the cost of keeping currently existing gas-fired power plants operational and provides a comparison with the cost of building new flexible and reliable units. Third, the socio-economic impact of an increased risk of a black-out is scrutinized. The economic asymmetry this induces in relation to the costs and benefits of maintaining sufficient domestic capacity to comply with the legally defined Loss of Load (LOLE) criterion of 3h is documented. Finally, the question of premature closure of currently existing Belgian gas-fired power plants that have not yet reached the end of their operational lifetime is investigated by means of different indicators throughout the paper.