Last-minute Belgian nuclear extension deal sealed

An 11th-hour agreement has been reached on the extension of the lifespan of Belgium’s 433MW nuclear reactors Doel 1 and 2, French energy company Engie confirmed on Tuesday.

The agreement was reached late on Monday night, as a deadline imposed by a law adopted in June to extend the lifespan was about to expire.

Doel 1 and 2 are the oldest reactors in Belgium and were previously going to be shut down this year, but the lifespans have now been extended to 2025 due to concerns regarding the country’s security of supply.

The Belgian government will now vote on two laws clearing the way for the extensions, according to Engie.

Belgian forward prices have already dropped significantly due to an authorisation to restart the 1GW nuclear reactors Doel 3 and Tihange 2, offline since March 2014.

The Cal ’17 Baseload contract, which traded Tuesday morning at €36.00, has shed almost €10.00/MWh since late September.

Under the agreement, the Belgian government has agreed to reduce an annual nuclear tax, to €200m in 2015 and €130m in 2016. From 2017, contributions will vary, at a minimum of €150m, calculated on the basis of operating costs, production volume and electricity prices. By contrast, the nuclear tax was previously fixed at €550m.

Engie, via its Belgian subsidiary Electrabel, will also pay an annual fee of €20m for the extension of Doel 1 and 2, into a Belgian energy transition fund, which was created by law in June. A similar fee was established for the extension of the 962MW Tihange 1, which was decided under the previous government.

The continued dominance of atomic power raises serious questions over the future profitability of gas-fired power plants in the region, which unlike renewables do not benefit from subsidies in Belgium. joachim.moxon@icis.com