ENERGY CONTRACTS – 29/05/2026

Welcome to AYA’s energy market update for May 2026. This month: gas and power under pressure from geopolitics and summer weather, ETS2, why flexibility is becoming a system requirement, and Belgium’s planned transmission tariff reform.

Geopolitics and summer weather keep energy markets under pressure

European energy markets remain under sustained pressure as geopolitical tension and supply concerns continue to shape short- and long-term pricing dynamics. Gas, electricity, oil and carbon markets all reacted strongly during the past week, with volatility remaining closely linked to developments surrounding Iran and global LNG flows.

On the gas market, TTF spot prices increased sharply as uncertainty surrounding the Strait of Hormuz intensified concerns over global LNG shipping routes. At the same time, cooler temperatures across Europe increased heating demand and accelerated storage withdrawals. European gas supply was further constrained by reduced Norwegian pipeline flows and maintenance at US LNG export facilities. Storage refill progress remains fragile, while Asian LNG prices continue attracting cargoes away from Europe.

Electricity markets also face upward pressure ahead of summer. Belgium and the Netherlands signed a new cooperation agreement on nuclear development, focusing on knowledge exchange, workforce support and small modular reactor research. Meanwhile, forecasts suggest France could experience one of its hottest and driest summers in recent years. Lower river levels and higher water temperatures may force EDF to reduce nuclear output while also limiting hydropower generation.

These risks come on top of already reduced Belgian nuclear availability. Around 4 GW of Belgian nuclear capacity has already been shut down permanently, while approximately 2 GW remains in maintenance between April and November 2026.

Oil markets also remain tight. Brent crude prices stayed above 100 USD per barrel as the International Energy Agency warned that the market could remain undersupplied through October. According to the IEA, more than one billion barrels have already been removed from circulation because of the conflict related disruptions.

For industrial energy consumers, this environment reinforces the importance of structured procurement strategies and timing discipline. Market movements remain highly speculative and strongly driven by geopolitical headlines. Companies should therefore ensure that hedging strategies remain aligned with operational needs, project pipelines and risk appetite, particularly for longer-term positions.

‘Current markets are reacting more to uncertainty than to fundamentals alone.’
Baudouin Vervrangen, Energy Partner at AYA

We continue supporting clients with structured hedging strategies, forward market analysis and procurement timing adapted to their operational exposure and flexibility potential. Contact your Energy Manager to review how current market volatility could affect your purchasing strategy and future energy budget planning.

ENERGY ROADMAP – 01/05/2026

ETS2: A New Layer of Uncertainty for Industrial Energy Strategy

The introduction of the new emissions trading system, ETS2, is set to significantly reshape the cost structure of energy consumption for industry. From 2028, the system will expand to cover buildings, transport, and additional industrial sectors, while removing free allowances.

This expansion will expose a broader range of companies to carbon pricing, fundamentally altering long-term investment decisions. One of the main concerns is the high level of price uncertainty. Current expectations suggest that carbon prices could range from €50 to over €300 per tonne of CO₂, making it difficult for companies to build reliable business cases for electrification or other decarbonisation investments.

In addition, ETS2 prices are expected to be strongly influenced by regulatory decisions, further increasing unpredictability. This creates a complex environment where companies must commit to long-term investments without clear visibility on future cost levels. At the same time, infrastructure constraints, particularly limited grid capacity, may delay or restrict electrification pathways.

Industry stakeholders are therefore calling for supporting mechanisms, such as Contracts for Difference and additional subsidies, to provide price stability. There is also a strong focus on reducing the electricity-to-gas price gap, which remains a barrier to electrification.

‘ETS2 introduces a level of uncertainty that makes investment timing and strategy more critical than ever.’
Charlotte Gehéniau, Energy Manager

For energy-intensive companies, ETS2 is not only a regulatory change but a strategic challenge. It directly impacts operational costs, investment planning, and competitiveness. Navigating this transition requires a structured approach that integrates carbon pricing scenarios, infrastructure constraints, and long-term energy strategy.

We support clients by translating regulatory developments into actionable insights and aligning decarbonisation pathways with market realities.

Please contact your Energy Manager to evaluate how ETS2 may affect your long-term energy and investment strategy.

FLEXIBILITY – 15/05/2026

Flexibility Becomes Critical as Power System Faces Structural Imbalance

The European power system is entering a new phase where flexibility is no longer optional but essential. The latest outlook for summer 2026 shows a significant increase in renewable generation, combined with higher electricity demand and reduced nuclear availability during maintenance periods.

These structural changes are expected to lead to frequent situations of excess electricity generation. In Belgium alone, up to 350 hours of negative load conditions could occur between March and August. Even when accounting for market flexibility, storage, and cross-border exports, a substantial number of these hours will remain.

At the same time, the system faces a growing risk of insufficient flexibility. Total flexibility needs are estimated at 3.8 GW, with up to 525 hours at risk of shortage. In extreme scenarios, 2.2 GW of flexibility demand may remain uncovered, requiring emergency measures such as cross-border support or technical disconnections.

Although battery capacity and storage are increasing, this growth is not yet sufficient to fully balance the system. Market mechanisms alone are expected to fall short in extreme conditions, highlighting the need for additional flexibility solutions.

‘Flexibility is becoming a system requirement rather than a market opportunity.’
Antoine Delhaye, Head of Flexibility

For energy-intensive companies, this evolution creates both risks and opportunities. Increased price volatility, including more frequent negative prices, can impact operations and procurement. At the same time, flexibility solutions such as load shifting and storage can generate value and reduce exposure to market fluctuations.

We help clients identify and implement flexibility strategies that align with their operational processes and energy costs.

Please contact your Energy Manager to explore how flexibility solutions can support your energy strategy.

ENERGY ROADMAP – 29/05/2026

Belgium’s Grid Reform Signals a New Era for Industrial Energy Cost

As part of the recently announced Federal energy norm, Belgium is preparing a structural reform of electricity transmission tariffs aimed at improving industrial competitiveness while supporting decarbonisation objectives. The federal government approved the draft framework in March 2026, and the proposal is now progressing through the legislative process before the regulator, CREG, defines the detailed tariff methodology.

The reform would allow differentiated transmission tariffs based on consumption behaviour. Industrial consumers with stable load profiles, anti-cyclical demand patterns, or controllable flexibility could receive more favourable tariff conditions. This includes companies capable of shifting demand, operating battery systems, or participating in demand-side response programmes.

The proposal comes at a time when Belgium remains relatively competitive for industrial energy consumers compared with neighbouring markets. Current benchmarking shows that medium-voltage industrial consumers in Belgium are among the most competitive in Europe after France, with Flanders maintaining the strongest position nationally. Belgium also continues to offer some of the lowest natural gas costs for industrial users in the region.

However, the regional differences inside Belgium remain important. Wallonia is still competitive overall but less attractive than Flanders, while Brussels continues to face disadvantages for electro-intensive industries. The reform therefore aims not only to reduce costs structurally, but also to encourage more efficient grid usage and support future electrification strategies.

For energy-intensive companies, this creates both opportunities and operational questions. Consumption flexibility is increasingly becoming an economic asset rather than only a technical capability. Companies able to stabilise demand, reduce peak exposure, or integrate flexibility solutions may improve their future network cost position while strengthening resilience against market volatility.

At the same time, businesses should avoid assuming that tariff reductions will apply uniformly across all industrial profiles. The final methodology from CREG will determine how strongly flexibility, predictability, and consumption behaviour influence network charges.

‘As energy systems become more dynamic, flexibility will increasingly determine industrial competitiveness.’
Shahane Bakhshyan, Energy Manager

We support clients by analysing consumption behaviour, identifying flexibility potential and aligning long-term procurement and decarbonisation strategies with the upcoming tariff framework. Speak with your Energy Manager to assess how future transmission tariff reforms could impact your industrial energy strategy.