EVs in Belgium : Current situation

Currently, there is a lot to do about EVs. The broad outlines of the technologies are already fixed: The charging of EVs will happen through a socket, installed in a garage, carport or even a parking space in the garden (slow charging), on company parking lots, public authorities (accelerated charging) or next to the road network (quick charging).

Today, only some charging stations have been installed in Belgium (Zaventem, Antwerpen, Mechelen, Oostende), in contrast to other countries and cities where there are already specific targets for the installation of charging stations for the next years, for example in London (25,000 charging stations in 2015) or in The Netherlands (10,000 charging stations in 2012).

The further development of EVs is expected for different reasons: EVs have many benefits because of the lower emissions of greenhouse gases, air pollution and a higher general efficiency when it comes to the use of fossil fuel. There will be no energy use in case of standstill, avoidance of noise pollution, low consumption costs, etc. In parallel, the use of „smart grids? aims to result in a stable electricity system, and tariff signals can be introduced to promote residential charging during the off-peak moments. Of course, EVs do bring along a higher purchase price because of the higher costs for the engine (e.g. the package of the battery to prevent the engine from overheating).

EVs will, however, only be introduced on a large-scale basis in our society (i) with appropriate regulatory intervention for, amongst others, a smooth introduction of EVs within the current framework of the electrical market and (ii) if further research and development is promoted. According to the federal energy regulator CREG, a large-scale introduction of the electric vehicle in Belgium is possible. The promotion and introduction of EVs will inevitably have an influence on the current electricity market. This will be discussed hereafter.

Consequences for the electricity market

Different opinions are expressed relating to the development of the electricity market as a result of the introduction of EVs:

- Vehicle-To-Grid-System: Peak demands on the electricity market which are caused by a large number of EVs charging electricity, can cause unbalance on the grid. In order to address this problem, CREG proposes the use of a Vehicle-To-Grid-System, being a system in which energy is charged and discharged on the grid. After all, it is likely that the car battery will be charged for a larger capacity than necessary for the distance that the car on average covers a day, causing for part of the battery to remain unused. Therefore a system of “arbitrage energy” could be installed, by which the spare capacity of the car batteries could be purchased at lower prices, and this temporary stored energy could then be sold at a higher price. With this vehicle-to-grid system, the electricity prices should be gradually reduced.

- Besides, ELIA intends to promote the further development of the day-ahead and intraday markets for electricity whereby the system for charging and discharging of EVs at large scale can play a role. According to Elia, the expansion of the market through coupling with other countries could also contribute to a higher liquidity and improved market signals for the optimisation of the charging programs.

- Furthermore, it must be noted that the ecological profit resulting from an EV can only be implemented if the policy is linked to renewable energy. In relation herewith, a large task looms for the policy maker (by means of cooperation of the federal and regional institutions) to implement such link appropriately. Several organisations have developed the idea of a monitoring system by which “smart EVs” can only be charged at charging stations which deliver renewable energy.

- The question can also be raised if the exploitation of charging points must be linked to the obtainment of a supply license from the regional regulators, with all consequences linked thereto. It is to be expected however that this will be softened by regulation. For example, in its decision of 13 April 2010, CWaPE, the Walloon energy regulator, already pleads for an exempted supply license for managers of such charging stations.

- Finally, it is uncertain whether the provision in a necessary uniform (= applicable to the whole Belgian territory) framework relating to charging points does not interfere with specific regional matters concerning energy. With relation to tariffs this seems quite univocal, in relation to more concrete applications and consequences for the distribution grid this is more unclear. Market players must remain attentive to this issue.

Promotion of EVs and charging stations

EVs and charging stations are promoted by the federal government and by the regional governments.

With relation to EVs

Cars for private use – For electric private cars, including station wagons and minibuses, a temporary tax cut of 30% can be obtained with the purchase of an EV, with a maximum of EUR 6,500 over the period 2010 – 2012. This measure can be prolonged beyond 2012. This measure is not compatible with the current reduced invoice for vehicles with a low CO2 emission.

Company cars – Since January 2010, the tax deductibility for company cars is measured by the CO2-emission volume of the vehicle, as a result of which EVs benefit from a tax deductibility of 120%. For plug-in hybrids a tax deductibility up to 100% can be obtained.

Other – Other federal initiatives set up for the promotion of EVs are the allowance for EVs to use the bus lanes during rush hour, reduced parking fees for EVs, information about available charging stations, subsidies and toll collection. Also on regional level, different initiatives have been set up to indirectly promote the development of EVs: for example, investments in research for the development of smart grids and batteries with large autonomy. As such, Flanders Drive invested for example 8 million EUR in research on green cars, which comprehends mostly EVs.

With relation to charging stations

Undertakings – Also undertakings wishing to install charging stations or plug-in hybrids can currently benefit from an increased tax cut of 15,5%. Furthermore, an accelerated depreciation period of two years can be applied for investments in charging stations during the period 2010 – 2012, which can be prolonged.

Private persons –The installation of charging stations at places accessible to the general public is encouraged by a 40% tax cut for expenses incurred for the installation of a charging station, with a maximum amount of EUR 180. This tax cut cannot be combined with other tax benefits, such as tax cuts for professional expenses, investment allowance, tax cuts for restoration of listed buildings and tax cuts for energy-saving expenses and energy-saving houses or houses in underprivileged neighborhoods or investments for fire safety and burglary protection.

Despite all these incentives recently implemented by the government, there are split opinions on the degree of interference by the government when it comes to this new market.

On European level, the Commission recently adopted a strategy for the introduction of EVs, which is supported by the European ministers. „Standardisation and interoperatibility? of EVs and charging stations is the key for them to win consumers' acceptance and thus to create a large-scale market introduction for EVs.