Subsidised gas-fired power needed to replace Belgian nuclear – TSO

Source: Heren

2017/11/15

If Belgium wants to phase out its existing nuclear plants by 2025, new thermal capacity financed through subsidies on the top of current market mechanisms will be needed, grid operator Elia said in a report released Wednesday.

The report has arrived before the Belgian government is due to agree a pact on the future energy mix, which is expected to clarify how Belgium will phase out its sizable nuclear fleet of 5.9GW.

Elia acknowledged that current wholesale electricity prices failed to guarantee the necessary investment to cope with Belgium’s 2025 nuclear exit, which is required by law.

“Any future scenario requires a large volume of new controllable [thermal] generation capacity in order to guarantee security of supply. To replace the full nuclear capacity after 2025, we will need at least 3.6GW,” the grid operator said.

UK-style capacity market

“That can only come via a support mechanism,” Elia added, and warned that “not deciding almost automatically” with investments made no later than 2020-22 “means extending the lifetime of up to 4GW of nuclear capacity”.

Elia’s report was welcomed by Belgium’s lobby group for electricity and gas companies (FEBEG), which on Wednesday advocated for the establishment of a capacity market as in the UK:

“This market is already operational and has been approved by the European Commission. The Commission authorises the establishment of such markets provided that they are open in a non-discriminatory manner to all technologies, existing and new capacities and finally cross-border participation,” the lobby group said in a statement.

In terms of future wholesale prices, additional interconnectors will be a prerequisite to keep wholesale prices in check, the operator said. Belgium is due to have 6.5GW of installed interconnector capacity by 2020.

Nuclear extensions

In contrast to French grid operator RTE, which published energy scenarios for 2035 last week with recommendations to delay the deadline for when to close nuclear plants in France, Elia’s approach is more pragmatic given the nuclear phase-out has already been required by a law signed in 2003.

Elia said in the medium-term, maximum quantities of renewable energy, supported by flexible thermal capacity, cross-border flows and increasingly demand management and energy storage, will be the most beneficial energy system for Belgium.

However, security of supply could not be guaranteed under this system unless adjustable thermal power plants were on the system, Elia said.

The country’s federal statistical bureau (BFP) published an extensive report in late October, saying that Belgium needed power capacity at a rate of 1.1GW annually until 2050 to ensure Belgium’s security of supply (click here to read story).

According to current timelines, the country’s seven units are scheduled to be shut down between 2022-25.

The shut-down of Belgium’s seven units, combined with the planned closure of a few older gas-fired plants, would slash Belgium’s electricity generation by two thirds.

Several lobby groups in Belgium have proposed extending part of their nuclear capacity by 2GW, a scenario that would reduce the need for new thermal capacity by 1.6GW, Elia said.

The Belgian government made changes in the law that paved the way for a deal with plant operator ENGIE Electrabel to extend the life of Doel 1 and 2 by ten years, from 40 to 50 years. The company has previously said the plants should be extended beyond 2025. herman.moestue@icis.com