Engie Electrabel has been served at his suggestion – Companies

For Engie, a bold contract is the best way to largely leave the operational risk to the government.

Last week, the federal government wrote a blank check to Engie Electrabel, the main operator of Belgium’s nuclear power plants. In return for an extension of the operation of the nuclear power plants in Doel 4 and Tihange 3, the government is prepared to limit the bill for decommissioning the nuclear power plants and geological disposal of the nuclear waste. If the costs are still higher than an amount still to be deducted, the government – and thus the Belgian taxpayer – will pay for it. That risk is quite high. In nuclear matters, calculations are made in the billions, and the bills rise rapidly than previously budgeted. This encore for Engie is also in stark contrast to the polluter pays principle, which Europe also imposes on the operators of nuclear power plants.

Last week, the federal government wrote a blank check to Engie Electrabel, the main operator of Belgium’s nuclear power plants. In return for an extension of the operation of the nuclear power plants in Doel 4 and Tihange 3, the government is prepared to limit the bill for decommissioning the nuclear power plants and geological disposal of the nuclear waste. If the costs are still higher than an amount still to be deducted, the government – and thus the Belgian taxpayer – will pay for it. That risk is quite high. In nuclear matters, calculations are made in the billions, and bills are rising rapidly than previously budgeted. This endowment to Engie is also in stark contrast to the principle that the polluter pays, as Europe also imposes on the operators of nuclear power plants. By knocking on a maximum invoice, Engie is therefore served according to his wishes. The uncertainty about the nuclear liability bill has long been a thorn in the side of Paris. The complaints are well-founded, because the Belgian government is hesitant about how it will permanently store the waste. This makes the already difficult calculation of the final invoice a lottery. The company wants to get rid of that risk and refers to the agreement that the operators of the German nuclear power plants got. The German government took over the nuclear obligations on fairly favorable terms for the manufacturers. The German government is left with the risk that the disposal will cost more than estimated. The chances are that Engie Electrabel will get a similar or even better deal. It’s a bridge too far. The public can and should give Engie more clarity about the final invoice, but the risk of the additional costs must remain with the operators. Belgium is therefore paying too high a price for the necessary strengthening of the energy supply. For that price, several nuclear power plants could be kept open longer and longer than ten years, that price could have been avoided. Until two years ago, Engie Electrabel assumed that the life of the youngest nuclear power plants would be extended, without any opposition from the government. The Michel government and the governments before then missed the opportunity to extend the operation of nuclear power plants on favorable terms. However, the negotiating positions have changed radically since the De Croo government confirmed the nuclear phase-out law. Nuclear energy also no longer fit into Engie’s strategy, which shifted focus to less risky activities such as renewable energy and operation of the energy grid. That change of course also laid the foundation for the current favorable negotiating position, also knowing that there was a good chance that Belgium would still need the nuclear power plants. Now that Belgium must indeed turn to Engie Electrabel, Paris can decide the terms, although France can make good use of Belgian nuclear energy given the ongoing problems with the French nuclear power plants. In this way, Belgium pays a high price for the years of lack of visibility and the delay in energy supply, and the price may rise further. Last week, a law was published in the Official Gazette that better protects the piggy bank for financing nuclear liabilities. Until recently, Synatom, Engie’s subsidiary that manages the piggy bank, was allowed to lend 70 percent of the already created provisions to Engie Electrabel. Specialists describe this loan as a cash credit to Engie Electrabel without guarantees. The new law obliges Engie Electrabel to repay these loans in full by 2030. The Nuclear Facilities Commission will also be empowered to prevent Engie Electrabel from becoming an empty shell. It is currently unclear to what extent this law will stand. The new law states, for example, also that the operators are still responsible for the additional costs of dismantling the power plants and disposing of the waste, but that the law was therefore not adopted on Friday, precisely the day of the publication of the new law. Official Gazette survived. There are even more loose ends in the letter of intent between Engie and the government. For example, who will step in if the piggy bank that has been set up does not provide enough to close the financing? Does the government or Engie Electrabel take that investment risk? And at what price are the nuclear power plants brought into the new company? What compensation does Engie Electrabel receive as operator of the nuclear power plants? For Engie, a bold contract is the best way to largely leave the operational risk to the government. These loose ends are best tied up in favor of the government.

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