Tihange 1’s life prolonged until 2025

The Tihange 1 power station will continue to operate for another ten years.

The Belgian state will collect an annual tax on nuclear gains, if indeed there are any.

In the end, the 45 minute-tirade by Groen member of parliament Kristof Calvo changed nothing: on Thursday, the Chamber of Representatives voted to extend the lifespan of the Tihange 1 nuclear plant. There were 92 votes in favor, 38 against and eight abstentions. Tihange 1, which was scheduled to stop production in 2015 after 40 years of service, has now obtained a ten-year stay of execution.

 

1. Ensuring security of supply

The analyses commissioned by the Di Rupo government seemed to have all converged – only a nuclear capacity of 866 MW could be deactivated in 2015. Beyond that, there was a risk of a blackout, or even total darkness during the coldest hours of winter.

 

However, according to a law passed in 2003, the Doel 1, Doel 2 and Tihange 1 plants, representing a combined power of over 1,800 MW (twice the amount recommended by experts), were supposed to shut their doors in 2015. These simultaneous closures were viewed as inconceivable by the current government, which has therefore been forced to change its strategy.

 

Consequently, the Belgian secretary of state for energy, Melchior Wathelet (CDH), put forward a comprehensive energy plan, a key point of which was the extension of the Tihange 1 power station, thereby overcoming the 2015 hurdle without great difficulty. That part of the plan has now gone into action. When the call for tenders launched for the construction of new gas plants (800 MW), adopted by the Belgian Council of Ministers, is also taken into account, then the threat of a blackout seems to have been put off for a good few years.

 

2. Collecting a tax.

In addition to the plant being prolonged until 2025, the question of a nuclear gains levy also raised its head. Today, the tax on nuclear gains at Tihange 1 is €90 million per year, which has been contested in the courts by Electrabel and EDF, the plant’s owners.

 

Melchior Wathelet clearly felt duty-bound to accurately define the principle behind the new tax to be imposed on Tihange 1 between 2015 and 2025 to avoid any further lawsuits, which he did in Article 4 of the draft bill voted through last night.

 

In summary, Electrabel and EDF will have to cost and justify the investments necessary for the extension of their plant. The current talk is of €592 million, a sum that still needs to be validated by CREG, the federal regulatory body.

 

From this investment, the owners should make a net profit of 9.3%, a percentage established in the legislation. Finally, the actual expenses related to the operation of the power station have to be included. Taking all of this into account, the cost of a MWh produced at Tihange 1 is estimated to be €41.8 in 2016.

 

What happens next is more straightforward. If EDF and Electrabel sell the electricity on the market at the same price or lower, there will be no nuclear gains to be taxed. On the other hand, if the resale price is more profitable, the Belgian state will earn 70 % of the surplus amount and the owners will split the rest. According to initial estimates, the state could well collect some €1.25 billion over ten years. This forecast should still be taken with a pinch of salt, given that predicting the sale price of electricity in 2025 remains a delicate task.

 

3. Reaction.

Melchior Wathelet is evidently pleased at having reached another important milestone on Belgium’s energy roadmap. “Today, we now know where we’re going. The route is clear,” he declared.

 

The development was met with less enthusiasm in Ecolo’s ranks, on whose behalf Muriel Gerkens stated that this particular step could have been avoided. “It’s a shame that an old plant’s life has been prolonged today just because nobody has taken the energy question seriously over the past ten years.”

 

XAVIER COUNASSE

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