It is important to note that in the previous and following sections two different results in terms of energy price differences are presented: one when comparing to electro-intensive consumers and the other when comparing to non-electro-intensive consumers. The first one, valid for electro-intensive consumers, compares prices for each region in Belgium to the low range of prices observed in the neighbouring countries; assuming that, in each of the neighbouring countries, the ‘competitors’ of Belgian industrial consumers qualify for the national electro-intensity criteria and hence benefit from important reductions on several price components for electricity.
The second result, on the other hand, is valid for non-electro-intensive industrial consumers in Belgium and compares the prices in the three Belgian regions to the top range of prices observed in the neighbouring countries; assuming that, in each of the neighbouring countries, the ‘competitors’ of Belgian industrial consumers do not qualify for the national electro intensity criteria and hence pay the maximum price.
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For both the electro-intensive and non-electro-intensive cases, the same prices for natural gas are presented. Whenever a range of results in neighbouring countries was available, we compared the prices in the three Belgian regions to the middle of the range of the neighbouring countries.
On a Belgian level, the information to identify the importance of electro-intensive companies within each of the industrial sectors under review is lacking. However, it is possible to give an indication on a purely macro-economic level as to the sector wide electro-intensity (and gas-intensity). It has to be clearly said that behind these macro-level numbers, a lot of complexity in terms of specific sub-sectors and consumer profiles is hidden. Nevertheless, they do shed a light on sector-wide energy-intensity in Belgium, and on the severity of the criteria in the neighbouring countries.
To have an idea how the electro-intensity criteria of the neighbouring countries relate to the level of electro-intensity in Belgium and its top 5 important sectors, first the concept of energy cost is introduced in this section, based on the electricity and gas prices for each sector and every region (in €/MWh) on the one hand (Figure 43) and MWh/€ of added value for electricity and gas (or energy intensity) per sector on the other hand (Figure 44). The energy cost expresses the cost of electricity and gas for the whole sector in terms of added value.
As can be observed from Figure 43, the electricity prices are highest for the NACE 10-12 sector, as in that sector, the more expensive consumer profiles E1 and E2 are relatively well represented.
The energy intensity figures have been presented before in section 3. As is illustrated in Figure 44, these figures are higher for gas than for electricity and vary significantly throughout the different sectors. Sectors that have high values for MWh/€ of added value are seen to be energy intensive, as is the case for the NACE 24 and, to a lesser extent, the NACE 23. The food & beverages sector (NACE 10-12) is the least energy intensive sector of those in the scope of the present study. Again, no separate data for the NACE 20 and 21 sectors were available.
From Figure 45 it is apparent that, although gas is relatively more consumed (see Figure 46) in the production process than electricity, its cost as a percentage of the added value is much lower than for electricity. This is caused by the relatively low gas prices in comparison with those of electricity and the fact that the consumption of gas per euro of added value is just slightly higher than that of electricity. Furthermore, it is observed that the electricity cost per added value is highest for the NACE 24 (because of E4 predominance) and NACE-23 sectors (E3 predominance) in all regions, while the energy cost in general is lowest for the NACE 10-12 sectors in all regions (because of E2 predominance).
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As stated above, in Germany, France and the Netherlands, certain industrial consumers can apply for reductions or exemptions in their energy taxes, based on national criteria. Most of these criteria are linked to the cost of energy expressed as a percentage of added value (see Table 4). For example, in Germany, the criteria to benefit from a lower tax scheme is an electricity cost higher than 17% of the added value. Although clear from Figure 45, no sectors in Belgium attain an electricity cost higher than 17% on a sector-wide level, as these are aggregate figures that hide information on the level of the industrial consumer. However, some individual industrial consumers could have a higher electro-intensity than the average and hence have to compete with consumers that qualify as electro-intensive in the neighbouring countries. For those energy-intensive companies, as we will see in the next section, there could be a substantial disadvantage vis-à-vis their German competitors.
The sector and region-specific electricity and gas price differences retrieved in section 9.1.1 are useful as they make it possible to compare electricity and gas prices for a certain sector and region with the European average. However, they cannot teach us whether the energy cost as a whole is advantageous or not. This depends on the amount of electricity and gas that is consumed throughout the production process. As this information is publicly available, we will outlay in this section how we can combine the electricity and gas price differences with the consumption volumes of both energy types in one single measure: the weighted energy cost difference. This measure makes it possible to compare the overall energy cost within a certain sector and region with the European average. If an industrial consumes a lot of electricity and almost no gas during the process, most likely the prices of electricity will have a large impact on the energy bill.
The relative consumption (𝑪𝒊) used in the first equation to calculate the energy cost difference is the ratio between the total volume of electricity and gas consumed in every sector and represents which of the two energy types are most intensively being used during the production process. It is calculated based on macro-economic data from the energy consumption accounts we retrieved for every sector (Federal Planning Bureau). An overview of the relative consumption per sector can be found in Figure 46.
The volume of each energy type consumer per sector is presented on the left axis, while the relative consumption (amount of electricity divided by the amount of gas) is presented on the right axis. It is apparent that all of the top 5 most important sectors have a relative consumption less than 1, meaning that all of the top 5 most important sectors consume more gas than electricity during the production process. For NACE 24, the consumption is relatively balanced (relative consumption of 0.82), but within the NACE 23 sector, almost twice as much gas is consumed (relative consumption of 0.48). Please note that for the chemical (NACE 20) and the pharmaceutical (NACE 21) sectors the same consumption figures has been used because of lack of more detailed data.
