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Belgian nuclear phase-out law coupled with windfall profit tax

Nuclear Monitor Issue: 
Bram Claeys, Bond Beter Leefmilieu

Federal prime minister Van Rompuy contemplates filling the budget deficit with a tax on the depreciated nuclear power plants. The Belgian nuclear energy production indeed delivers a profit of at least 1 billion Euro a year to Electrabel (GdF/Suez). They have been depreciated quicker in the regulated market, at the expense of the Belgian consumer. Therefore, it is more than legitimate to try to recuperate this windfall profit, something that the environmental movement, the trade unions and the consumer’s organizations, have been advocating for over a year now. There is however no reason at all to couple this windfall profit tax with a lifetime extension of the nuclear power plants.

The windfall profit tax is a compensation for the faster depreciation of the power plants. It increased the Belgian power prices, and therefore the Belgian consumer has a right to compensation, now that the markets have been deregulated. Electrabel does not need to get something in return. To the contrary, if in return for the tax, the power plant’s lifetime would be extended, this would mean an extra bonus for Electrabel. They would thus be able to maintain their domination over the Belgian energy market with their depreciated power plants.

And of course there is no logic to the train of thought of the prime minister, as he is looking for a solution to the budget deficit today, with a fix that would only enter into force as of 2015, the date the first reactors should shut down.

The energy minister, Paul Magnette, ordered a team of Belgian and international experts to advise him on the ideal energy mix for Belgium. The so-called GEMIX-commission produced their draft report on July 2. The purpose of the report is to help decide the Belgian government what to do with the nuclear power plants.

The primary advice of the commission is to focus much more on energy efficiency. They also advocate strongly in favor of a windfall profit tax on the nuclear power plants. The commission puts a lot of emphasis on the sub-ideal functioning of the Belgian power market. And of course they discuss at length the possibilities for lifetime extension of the nuclear power plants. The report considers all options as still open, including the maintenance of the phase out as planned. It does however not consider the building of a new nuclear power station as a realistic option at this point, due to uncertainties over the economics and technical aspects of the new generations of nuclear power plants.

The argumentation in connection with the lifetime extension is very weak, however. Notably the feasibility and financial aspects of the extension is very poorly documented, and omits key aspects. The report now enters a phase of public consultation.

Source and contact: Bram Claeys, Bond Beter Leefmilieu. Tweekerkenstraat 47, B-1000 Brussels, Belgium