As Belgium has been in an iron grip of election fever for almost the entire year we have seen that the liberalization has come to a full stand still. The decision makers were not able to implement new necessary regulation to support the next steps in the different parts of the value chain.
In production nothing major came on line, only some small production units were started as most of them were so called â€œgreenâ€ production. Therefore we saw even only two weeks ago massive import from the Netherlands and France when on one day Belgium needed at a peak 14000 MW, due to mostly cold weather. The risk of a major problem with the grid and as such the availability of power is getting bigger. As there is no vision on the ideal production mix for Belgium nobody knows what to do, one wants to build a coal plant, other ones are building big gas fired plants, and others again are saying we need to invest in decentralized small co-gen units. It is amazing that something as important as energy to run our civilization is left without careful planning by all parties involved. What we have seen for example in the States, were numerous gas plants were build in the â€™90s without a clear overview, which has resulted in a large loss of investments as a lot of those plants have become to expensive to run.
Gas actually should not be used to massively to produce base load electricity or even peak; gas is a scarce resource and much needed for heating and cooking. One of the reasons why gas plants are build is they are relatively cheap, fast to build and they are more efficient when compared with coal. Governments have to realize that private owned energy companies are going to choose the short term less risky alternative rather than taking elements they control less such as new technologies, energy efficiency, regulatory limitations and political acceptance. Different than for example telecom energy companies invest little to nothing in R&D and innovation. This industry is still run more or less on the same way over the last fifty years. This is also caused by the historical monopolies that are still mostly in place all over Europe today. Having worked myself for a Dutch energy company over the last five years I have seen the reluctance to innovate and for example to invest in R&D. The management even stated that it was not their role to do so; recently they are changing their ideas. In case we want to insure that we build the next generation energy solutions all companies active in the energy sector will have to start thinking out of the box and accept that R&D is essential in every part of the value chain.
As for 2008 it is not clear yet if a new government will take the lead in defining the much needed next steps for an efficient liberalization. Nevertheless the energy question will get more attention as prices will continue to rise to a level were real solutions are needed. Looking back at the end of last year I see that the messages for this year are similar and confirm higher prices over the months to come.