The Belgian Council of Ministers has cleared a new draft legislation on the power plant subsidy scheme called CRM (capacity remuneration mechanism), which will be transmitted for opinion to the Council of State. This capacity compensation mechanism represents a major reform of the electricity market that will meet a triple objective: ensuring the domestic power supply security, allowing the implementation of the energy transition and enabling the nuclear phase-out at the lowest price for the consumer.
As Belgium will exit nuclear power as of 2025, around 3.6 GW of new capacity will be required to guarantee security of supply from this date. The proposed CRM aims at stimulating investment in the power sector to cover these electricity needs. Two auctions will be organised: one before each year of delivery, and one 4 years before each delivery year, in order to acquire the necessary capacity to ensure the security of supply of the country based on the volume determined by the power transmission system operator (TSO) Elia. Elia will prepare two reports: one containing a calculation of the volumes in capacity needed and a second one containing a proposal of the parameters necessary for the organization of the auction. The selected capacity providers will sign a contract awarding them a bonus as the result of the auction.
The control of the proper operation of the capacity compensation mechanism will be entrusted to the Electricity and Gas Regulatory Commission (CREG).