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More people, cheaper power: the success of energy bulk purchase in Belgium

By Sara Giovannini on 5 April 2018


An energy bulk purchase open to all

At the beginning of this year, the city of Brussels launched the second edition of the energy bulk purchase for the city and the Wallonia Region, in partnership with the platform Wikipower, acting as intermediary and promoter.

A bulk purchase allows a group of people to obtain very competitive prices from a service provider, thanks to the stronger purchasing power that all the people joining the initiative have together. A provider will be able to offer products and services at a much lower price with the promise of gaining a considerable number of new customers in exchange. In the Brussels case, the collective purchase is covering green electricity and gas.

For the first time in 2014 around 1000 households had switched to a greener and cheaper energy provider, each saving an average of 186 euro per year. This year the initiative has been even more successful. The subscription period ended on February 28 with more than 3000 households
joining
- each expected to save around 225 euro per year. Following the negotiations, it was announced that the Belgian company Mega was offered the contract. Wallonia and Brussels residents had until the end of March to choose if they were staying with their current provider or switching to Mega. All residents could benefit from the contracted offer, no matter if already registered to the bulk purchase or not.

Selecting a competitive and green provider

The selection criteria used for the bid were the competitiveness of the offer, the quality of the service but also if the provider was deemed “green” or not. For this last criteria, Brussels municipality referred to Greenpeace’s Green Electricity ranking. According to the law, a company can very easily advertise a plan as 100% green: it is enough to present a certificate of origin, proving that the electricity has been produced in Europe and that it is coming from renewable energy sources. The provider is not obliged to have its own renewable energy plants nor invest in renewable energy production but can instead purchase renewable energy produced somewhere else and re-sell it. That is why Greenpeace’s ranking takes into account also the production capacity and the energy purchased by each energy provider.

Mega produces 45% of the energy it sells and most of it comes from renewable energy sources. Furthermore, the company invests almost exclusively in renewable energy production capacity. Nevertheless, according to Greenpeace, Mega is purchasing a considerable amount of energy originating from polluting sources so there is margin for improvement.

Better deals, initiated by city and regional authorities

The energy bulk purchase organised at city and regional level is an excellent initiative to empower individuals in their energy choices. A report of the Fondation Roi Baudouin mentioned that around 20% of the Belgian population is subject to fuel poverty. Additionally, since the liberalisation of the energy market in Wallonia and Brussels Regions, many consumers found themselves unprepared to deal with the complexity of the energy market and the high number of offers available. Prices for the same service and quality can vary up to 20% from one company to another but yet many residents never changed provider over the time.

Municipalities belong to the level of governance which is closest to the citizens, so they should provide them with clear and simple information on the cheapest and greenest energy options!

More information:
https://energie.bruxelles.be/

Brussels City and Brussels-Capital Region are members of Energy Cities.

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