French power group Engie and the Belgian federal government have signed a definitive agreement on the extension of unit 4 at the Doel NPP and unit 3 at the Tihange NPP. The text of the agreement was finalised earlier in December and has now received all the required approvals. The agreement confirms and ratifies the main principles of the framework agreement signed in July. These include:
- A commitment by both parties to carry out a Flexible Long-Term Operation (LTO), for an estimated investment of €1.6-2bn ($1.7-2.15bn), and to make every effort to restart the nuclear units by November 2025;
- The establishment of a legal structure for the two extended nuclear units, owned equally by the Belgian state and Engie;
- An economic model for the renewal, with a balanced distribution of risks, in particular through a Contract for Difference mechanism for the remuneration of electricity production. The exercise price will be based on the real cost of renewing the nuclear units. These costs will be estimated based on the nuclear safety requirements established by the Federal Agency for Nuclear Control (FANC). An initial price will be established in 2025 and updated in 2028 based on the final cost of the extension, to cover the period until 2035;
- The fixing of a lump sum for future costs related to the processing of nuclear waste, covering all of Engie's nuclear installations in Belgium, for a total of €15bn, payable in two instalments according to waste categories;
- The lifting of restrictions on Electrabel's non-European assets.
The impact of Engie's increased commitments regarding the transfer of nuclear waste provisions on non-recurring net income and on economic net debt has already been determined as of 30 June. Engie confirms that the agreement does not change the outlook of the group in the medium term.
Belgium has seven nuclear power reactors – three at Tihange near Liege and four at Doel near Antwerp. All seven units are pressurised water reactors operated by Electrabel, part of Engie. Apart from Doel 1&2, which are 430 MWe plants, the others have a capacity of approximately 1000 MWe. In March, Belgium's Federal Agency for Nuclear Control (FANC) ruled out extension of the three oldest nuclear plants – Doel 1&2 and Tihange 1. Instead FANC advises depending on Doel 4 and Tihange 3 to avoid power shortages.
Tihange 2 was shut down in January, and Doel 1&2 are due to be disconnected from the grid by 2025 in line with the 2003 nuclear phase-out law. Tihange 2 was the second reactor to close under the phase-out law after Doel 3 closed in September 2022. In January, Engie-Electrabel reluctantly agreed to extend the operating lives of Doel 4 and Tihange 3 by 10 years from 2026 in face of the current energy crisis.
The final text also contains the technical and operational conditions for restarting the two units from November 2025, with full guarantees of nuclear safety. According to the Belgian government, the operation of the reactors, together with the ongoing decommissioning work on other units, will maintain about 4,000 jobs (direct, indirect and derivative) and will involve the hiring of 200 additional workers in the coming months. This agreement has yet to be approved by the European Commission - which is currently in consultation - and by a vote on the legislative amendments.
Catherine MacGregor, managing director of Engie said the agreement “allows a balanced distribution of the risks for the renewal of the two nuclear units and for the Engie Group removes the uncertainties about the evolution of the provisions related to the nuclear waste”.
Image: (L-R) Belgium's Energy Minister Tinne Van der Straeten, Prime Minister Alexander De Croo and Electrabel CEO Thierry Saegeman at the signing of the agreement (courtesy of Belgium Government)
