Skip to main content

Belgium's power supply plan beyond 2016 raises nuclear rent

Belgium has adopted measures aimed at improving the electricity market after 2016. The operating life of the Tihange-1 nuclear power plant will be extended by 10 years, to ensure power supply after 2016-2017. In turn, the State will guarantee a sale price of €41.6/MWh for electricity generated at Tihange-1; this price includes production costs (excluding lifetime extension, i.e. €27.4/MWh), investments in lifetime extension (€600m, or €8/MWh) and a margin of €6.4/MWh. Beyond that price, pre-tax revenues will be shared between the plant operator (30%) and the State (70%). In the case of electricity prices below €41.8/MWh, the State would have to subsidise nuclear power generation, which seems unlikely to the Energy Minister. One third of these profits would be used to invest in medium term energy projects, the rest would be invested in wind power. Belgium aims to launch a tender for 800 MW of gas-fired capacity and these profits will be used to reduce the contribution of SMEs and households to offshore wind development.