Why was the capacity rate introduced?
The way our society consumes electricity and produces it itself has changed dramatically in recent years. This is due to the energy transition: the much-needed switch from our current way of using energy to a future-oriented energy approach.
For instance, Europe wants to be climate neutral by 2050. This can only be achieved by moving away from fossil fuels, replacing them with renewable energy sources, such as ‘green’ electricity from solar and wind power. Consequence: everyone uses and consumes more electricity than before.
The introduction of the capacity rate should contain the load on our electricity grid in the future. After all, spreading consumption helps avoid unnecessarily high peaks.
What is the capacity rate?
The Flemish energy regulator (VREG) decided to calculate the net rates (price you pay as a user to the power grid operator Fluvius) differently in the Flemish Region from 1 January 2023. From then on, the net rate will no longer be calculated solely on the basis of your total consumption, but also on the basis of your peak consumption in each month. In this way, the regulator wants to encourage all users to spread their electricity consumption as well as possible, and limit consumption peaks.
Your electricity bill consists of 3 rate components:
- Network rate: the costs of constructing, operating and maintaining the electricity networks and transporting electricity.
- Energy rates: the cost price for the energy consumed during the billing period.
- Various types of charges and VAT
The capacity rate covers only part of the network rates. Instead of determining it based on your total consumption, since January 2023 it has been calculated partly based on your peak consumption.
What exactly does this mean? The more energy you take off at the same time, the more your consumption peaks and the higher your grid charges. So: the more you spread your consumption to smooth out or avoid peaks, the lower the grid costs on your bill.
Only if you have a digital meter at home, the capacity rate is currently relevant. For analogue meters, a flat-rate peak consumption is applied.
What is peak power (peak consumption) ?
Peak power is the maximum amount of electricity you consume at the same time. If you run a lot of household appliances at the same time, you draw a lot of power from the grid, making the peak higher.
Read how to find out your peak consumption here
How does the capacity rate work?
From 1 January 2023, part of the network rates will no longer be calculated on the basis of ‘how much’, but rather on the basis of ‘how many at a time’. That calculation will be based on some new rate elements, such as the quarter peak, the (average) monthly peak and the billing peak. The capacity rate will now calculate part of the network rate based on the average of the highest monthly quarter peaks measured by the digital meter.
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Quarter peak: the average power on a quarter-hourly basis (in kW)
To keep costs down, it is important to use as few appliances as possible at the same time within the same quarter-hour. This is because your digital meter records your consumption (in kWh) every 15 minutes and reports the average power for each quarter-hour. Your grid costs are determined on the highest peak you consume during a quarter-hour within a month. This only applies to households with a digital meter. For those who still have a classic meter, grid costs are still calculated to a greater extent based on consumption. -
Monthly peak: the highest quarter-hourly power in the month (in kW)
The monthly peak is the highest quarter-hourly peak of the month. Obtaining a low monthly peak is therefore possible by limiting your quarter-hourly consumption. The capacity rate is calculated on the basis of your monthly peaks. - Average monthly peak: the average of the peaks of the previous 12 months. This value is used to calculate the capacity rate. To calculate the Average monthly peak, you start from January 2023. That is when the capacity rate was introduced.
- Billing peak: The billing peak is the final value used to calculate the capacity rate. It is the weighted average of the average monthly peaks over your billing period. That billing period depends on your choice of annual or monthly billing with your energy supplier, or due to other events such as a supplier change or move, for example.
Source : Fluvius (only in Dutch)