Belgium’s Lavish Energy Use Sheds Light on More Than Just Its Roads

Belgium’s system rewards local politicians for keeping the bulbs blazing, said Peter Reekmans, speaking from his experience as the mayor of the town of Glabbeek.

Streetlight consumption translates into profits for electricity producers, distributors and the state, he said. The profits of electricity distribution companies are paid out “in dividends to the local municipalities that own shares in them, and in salaries and stipends to the local politicians who sit on their oversight boards,” he explained.

The system has “built-in conflicts of interest” for local politicians deciding on energy policy, including about streetlights, he said. “It also makes politics in Belgium quite a profitable profession.”

Belgium’s Lavish Energy Use Sheds Light on More Than Just Its Roads
Belgium’s Lavish Energy Use Sheds Light on More Than Just Its Roads

Mr. Reekmans recently published a book exposing hundreds of obscure government structures involved in what he calls “ethically dubious decision-making.”

He estimates that about 10,000 remunerated seats on the governing boards of public utility companies — not only in the energy sector — are occupied by local politicians.

“With seven governments, six parliaments, 10 provincial governments, 589 municipalities and hundreds of public utility companies, the state has grown so complex that many shady government structures have remained hidden for a very long time,” he said.

And where there is complexity, some energy companies see opportunity, said Eric De Keuleneer, an academic at the Solvay Brussels School of Economics and Management and an expert on the Belgian electricity market.

“Many people who work for distributor companies, and even for the government energy regulator, used to work for Electrabel before, and vice versa,” he said.

In fact, he said, “Electrabel engineered the high profitability of the distributor companies.” Electrabel owned shares in those companies, and appointed senior management positions in them, until last year, when the state bought them out “at inflated prices,” he said.

Today, a big part of the profits from distributor companies “are used to repay bank loans they took to buy out Electrabel’s shares,” he said.

Anne-Sophie Hugé, a spokeswoman for Electrabel, denied in an interview that the company still maintained ties to state-owned distributor companies, since it sold its shares in those companies last year.

She also said that the prices for its electricity and the shares it sold to the state simply reflected “Belgium’s free and very competitive market forces.”

She added that the utility was working hard to increase the share of Belgium’s energy supply that comes from renewable sources, which requires costly infrastructure upgrades.

Even so, the country’s share of energy from renewables is around 7.8 percent, about half the European Union-wide average, while the government has extended until at least 2025 Electrabel’s permits for seven nuclear reactors that date from the ’70s.

Electrabel remains Belgium’s sole nuclear producer and its main energy supplier, a virtual monopoly that critics say has left Belgians paying dearly for their electricity.

Even as most of Belgium’s energy comes from nuclear power — a comparatively cheap source of energy — the price of electricity excluding taxes is the highest in the European Union.

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Since 2010, the average yearly electricity bill of Belgian households has risen 40 percent, to about 900 euros, or $1,060, leaving 20 percent of Belgians with difficulties paying their bills. Prices across Europe rose half as much in the same period.

While other European countries are working to comply with the Paris climate agreement by cutting emissions and investing in renewables, Belgium is projected to fail in reaching its targets for 2020.

Belgian energy consumption per capita remains among the highest in Europe — behind only much colder countries like Norway, Finland, and Iceland.

“The nuclear power lobby in Belgium not only dominates the energy market,” said Mr. De Keuleneer, the economist, “it also dominates Belgium’s complex political system, exploiting conflict-of-interest situations on all government levels.”

That system has proved profitable for Electrabel. Since 2007, the company has operated as a subsidiary of the French energy giant Engie, the biggest independent utility in the world, according to Forbes.

Engie has $168 billion in assets in 70 countries, but a fifth of its profits over the last decade have come from Electrabel alone, annual accounts from the National Bank of Belgium show. (Some say even that estimate is low.)

Electrabel is not the only party to profit, however.

Electricity-distribution companies and politicians have done well, too, according to Michel Vercaempst, 63, who has worked for both the Belgian government’s Energy Department and for Electrabel over four decades.

The state-owned companies that distribute electricity to consumers each have a de facto monopoly in certain municipalities, charging far more for the service than it costs, Mr. Vercaempst said.

About one-third of the price of household electricity in Belgium goes to distribution companies, a third to energy producers and a third to the state, he said.

The distribution companies make a profit of about 12 percent, on average, he added, compared with about 6 percent in France, where a similar system exists.

“That’s enormous,” he said. “Not even Goldman Sachs can ensure such profits.”

The conflicts and contradictions of such a system come together at the local level, where politicians like Koen Kennis make their living, as well as decisions about when and whether to leave streetlights on in their districts.

Mr. Kennis is a city councilor in Antwerp, which has about 45,000 streetlights. He is also a board member of a state-owned electricity distribution company, Eandis.

Antwerp keeps 95 percent of its lights on overnight and buys the electricity for them from Electrabel. Eandis then distributes that electricity. For overseeing this transaction as a board member, among other things, Eandis pays Mr. Kennis €10,000 a year.

In total, Mr. Kennis holds over 35 political positions in relation to his public office, half of which are remunerated.

Asked if he saw any conflict in the arrangement of his mandates, he said that the system preceded his entry into politics and that his remunerations were fixed by law.

“I’m working hard from the inside to reform the cluster of conflicting agencies and reduce the number of mandates,” he said.

The debate about all-night lighting was still continuing, he said, because people have gotten used to it.

Otherwise, “It’s very simple,” he said. “One phone call to Eandis today, and they turn off those lights with one switch tonight.”

But for now, most lights remain on, especially along local roads and Belgium remains visible from 250 miles above Earth.

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