Flanders lessens the energy bill for all Flemish families and singles

In 2022, costs of EUR 201.6 million (including VAT) will disappear from electricity bills. A large amount in public service obligations will be borne on a one-off basis by the Energy Fund of Flemish Energy Minister Zuhal Demir to lessen the bill for Flemish families and single people. “Everyone feels the energy crisis. That is why we are choosing measures that will benefit all 2.8 million families and single people, as well as small business entrepreneurs,” Minister Demir says.

The proposals on the government table were based on three main principles. Above all, Zuhal Demir insisted that measures should apply to all 2.8 million Flemish families and single people, as well as small business entrepreneurs. On the other hand, the measure had to be able to take effect as soon as possible and focus on reducing the electricity bill. After all, lower electricity costs are of crucial importance for the energy transition.

Fair choice for 2.8 million families, single people and 600,000 small business entrepreneurs

The government is succeeding in reducing costs by EUR 166.6 million in 2022 through the public service obligations of the grid operator, by bearing those costs itself via the Energy Fund and its reserves. “Reserves help in times of crisis,” Zuhal Demir says on the matter.

Because the federal government also charges VAT on public service obligations, a total of EUR 201.6 million (EUR 166.6 + 21% VAT) disappears from the electricity bills of everyone connected to low voltage.

“That means that this measure does not apply to large companies and industry, but to all 2.8 million Flemish families, single people and 600,000 small business entrepreneurs, such as cafés or hairdressers. A choice that is very fair, especially in view of the large federal investments in social tariffs in particular, and therefore a limited target group,” Zuhal Demir says.

In close cooperation with Fluvius and the VREG, everything possible is being done to ensure that the measure can be settled in the tariffs as early as 1 January 2022.

A reduction of about EUR 50 for the average family

How much this will be for a family depends on their own consumption, of course. The cheapest energy is the energy that is not consumed. For an average family with an energy consumption of 3.5 MWh, the above measures will lower the electricity bill by EUR 43 in 2022. This is in addition to the reduction in the network tariffs resulting from the adjustment of the tariff methodology by the VREG, which may bring the total to about EUR 50.

It’s not just a one-off: structural interventions as well

The Flemish Government also decided to stop the existing subsidies to new fossil natural gas connections in new buildings from mid-2022. This will allow the government to save an additional EUR 34 million from the energy bill. However, the flat Fee A fee is remuneration requested by the government for a specific service that it provides. The difference between a fee and taxes is that there is an immediate service provided in return for a fee. An example is the parking charges that the municipalities can enforce. They can carry out the collection thereof themselves, or contract this out. fee of EUR 250 for a natural gas connection will remain for existing homes that want to connect to natural gas, for example, because they are moving away from heating oil. This actually results in a CO2 reduction of more than 20%. Flemish MP Andries Gryffroy explains that subsidies for new natural gas connections are, by definition, unwise. “That is why we are choosing to stop this and shift costs from electricity to fossil natural gas. In this way, we will reduce the electricity bill structurally from 2023 onwards, which will help the energy transition.”

In the coming year, Zuhal Demir will also look at the initiatives that could reduce the electricity bill structurally. Moreover, an important task left is the reduction of the historical debt of green energy certificates. The Flemish Government will withdraw EUR 60 million in additional certificates from the market this year.