EC approves Belgian support scheme for ageing reactors

20 March 2017

The European Commission (EC) on 17 March cleared a Belgian support scheme to compensate the operators of three nuclear reactors for potential financial risk, saying the measure was in line with European Union (EU) state aid rules.

In 2014 and 2015, Belgium had agreed with Engie-Electrabel and EDF Belgium to prolong the operational lifetime of units 1 and 2 at Doel nuclear power plant (owned by Engie-Electrabel) and unit 1 at Tihange NPP (owned by Engie-Electrabel together with EDF Belgium). The companies committed to invest €1.3bn ($1.4bn) in exchange for authorisation to run the plants for another 10 years. The companies are to receive financial compensation, if Belgium decides to close the reactors earlier, modifies the level of nuclear tax to be paid by the owners or changes other economic parameters of the agreements.

Under the EU Treaties, member states are free to determine their energy mix and have the choice to invest in nuclear technology. The EC must ensure that, when public funds are used to support companies, this is in line with EU state aid rules, which aim to preserve competition in the single market. The EC said that while the two companies were given an economic advantage, Belgium was able to prove that there would be no undue distortions of the energy market. Every year, Engie will sell a volume equivalent to its share of the annual production at the three reactors concerned on regulated electricity markets, which the Commission said would increase competition.

The EC found that the investment guarantees provide an economic advantage to Engie-Electrabel and EDF, which goes beyond what they would have been entitled to under general Belgian law. Under EU rules, such state aid has to be limited and proportionate to the objectives pursued. However, the Commission concluded that Belgium has demonstrated that the measures avoid undue distortions of the Belgian energy market. There will be an obligation on Engie-Electrabelto sell on regulated electricity markets each year a volume equivalent to its share of the annual production of the three reactors. It will ensure liquidity on Belgian electricity markets and help to increase competition between electricity suppliers. On this basis, the Commission has approved the measures under EU state aid rules.



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