EC OKs Belgian Nuclear Extension

The European Commission said March 17 it has approved Belgium’s state aid package extending the operating life of three ageing nuclear power plants there run by Engie subsidiary Electrabel and by EDF Belgium. Separately the EC has cleared a multi-billion dollar divestment by UK National Grid.

The Belgian subsidy package will now ensure that a significant share of the country's power generation will continue to be provided by nuclear, rather be subsituted by coal or gas. The package relates to the Tihange 1 and Doel 1 (both Engie) and Doel 2 (EDF) nuclear reactors and follows agreements in 2014 and 2015 reached with the owners to extend their operating lifetimes that were notifed to the EC six months ago.

Under the agreements, the two companies committed to invest around €1.3bn in return for authorisation to run the plants for another ten years. The companies will receive financial compensation, if Belgium decides to close the reactors before that ten-year period ends, or modifies the level of nuclear tax to be paid by the owners, or makes other major economic changes.

Although the commission found that the guarantees to Engie and EDF go beyond what they would have been entitled to under general Belgian law, it concluded that the Belgian government had shown that the package “avoids undue distortions of the Belgian energy market” by including an obligation on dominant Engie to sell on regulated electricity markets each year a volume equivalent to Engie’s share of annual production from the three reactors.

IEA data shows that of Belgium's 67 TWh power generated in 2015, 39% was from nuclear, compared to gas 32%, renewables 23% and coal 6%.

The European Commission has also cleared National Grid’s sale of a 61% stake in NGGD, its medium-pressure UK gas distribution business, to a seven-company consortium led by Australia’s Macquarie.

The commission noted that Macquarie controls two gas-related companies in the UK – Energetics, an independent gas network; and Corona Energy, a gas marketer to large industrial and other clients – but concluded the proposed deal raises no competition concerns. When the deal, valuing 100% of NGGD at £13.8bn ($17.1bn), was announced three months ago by NGrid, it expected its completion by the end of March 2017 subject to approval from Brussels.

Mark Smedley