Economy

So that nuclear electricity finally benefits the Belgian economy

The public favors of the last decades have been very advantageous for Electrabel/Engie, but have been very costly for the Belgian economy and consumers.

In Belgium, electricity producers have had, since the 1950s, the authorization to manage the production system in “regulated monopoly”; a public service system allowing them to plan long-term investments avoiding competition and virtually all risks. The producers had agreed by agreement to manage the monopoly they had received in the general interest. Costs, tariffs, respect for the general interest and the integrity of the system were controlled by a “monitoring committee” made up of the social partners.

Eric De Keuleneer.
©France Dubois

The private producers then merged in the 1990s into Electrabel, and from the 1970s received the authorization to amortize the investment cost of nuclear power plants in an accelerated way, in 20 years, when they had a lifespan of 40 years, which caused a significant additional cost for decades until 2005.

This additional cost was borne by consumers, individuals and SMEs (large consumers obtained preferential tariffs), to whom the producers and the control committee promised that they would profit “later” from stable and advantageous tariffs, which did not materialize, the consumer seeing himself invoicing the market price based on gas price.



Believing and asserting that Belgian nuclear electricity is cheap for the Belgian consumer is at best a mistake…

Still, the civil risk of accident is essentially borne by the Statewhich constitutes a considerable subsidy, and moreover the nuclear liability is insufficiently provisioned. The considerable profitability of Belgian nuclear is mainly used to transfer profits to the parent company Engie (directly and indirectly the equivalent of a few tens of billions over 20 years).

Believing and asserting that Belgian nuclear electricity is cheap for the Belgian consumer is therefore at best a mistake…

How to calculate the pension?

Belgian nuclear production (55 to 60% of Belgian electricity production) constitutes, due to its low cost, a “rent” for the producers, annuity which is subject to specific taxation.

This pension was estimated by the Creg and the National Bank between 800 million and 1.5 billion in the years 2007-2010and has likely remained at those levels since then, except for the few semesters when some plants failed.



Electrabel’s statements are unreliable, as the company has in the past regularly transferred profits to other companies in the Engie group (…) to avoid drawing attention to super profits from nuclear. They even sometimes pretended to be at a loss…

Taxation has been rather low and even decreasing under the Michel government. The exact amounts of the rent in 2022 and even 2023 are difficult to estimate, because Electrabel/Engie says it has pre-sold a large part of its production, which is possible, in the very short term in any case.

More Electrabel’s statements are unreliablebecause the company has in the past regularly transferred profits to other companies of the Engie group, by selling cheap electricity, advantageous gas contracts or via notional interest forTax optimization and to avoid drawing attention to the super profits of nuclear. They even sometimes pretended to be at a loss…

The calculation of the Belgian nuclear rent should in reality also include the Electrabel/Engie section of the French power plant at Chooz and the profitability of Coo pumping stationtwo investments paid for via the tariffs regulated by Belgian consumers.

In France, nuclear income has been treated differently. The nuclear producer EDF is obliged to allow consumers to benefit from it via the “Regulated Access to Historic Nuclear Power” system, ARENH, which allows French retail electricity prices to be substantially lower than Belgian prices.

Contempt for the general interest

The wholesale electricity market is generally mainly influenced by gas pricesand through speculation, which incidentally also manipulates the price of gas. Using such manipulated wholesale prices as such to set consumer prices is aberrantespecially in a country where more than 70% of production (nuclear, wind, hydro) has historically been subsidized by the consumer and offers stable cost prices independent of gas prices.



The economist Geert Noels was well founded during a recent debate with the management of Electrabel/Engie to challenge them on their apparent contempt for the general interest.

If the negotiations relating to the extension of two power stations do not concern the definition of the price paid by Belgian citizens and companies for their electricity, these extensions would be mainly in the interest of Electrabel-Engie. The advantage for Engie would be even greater if, to “consent” to the extension, they obtained a limitation of their responsibilities with regard to the financing of dismantling and waste treatment.

The public favors of the last decades have been very advantageous for Electrabel/Engiebut have been very expensive for the Belgian economy and consumers, who pay tariffs (excluding taxes) practically the highest in Europe, when they should be the lowest. Consumers who had relied on the assurances given by Electrabel of durably stable future prices and of an electricity system managed in the general interest; given assurances with the active approval of the Federation of Belgian Enterprises (FEB)who dominated the control committee, and the state who supervised him. The economist Geert Noels was well founded during a recent debate with the management of Electrabel/Engie to challenge them on their apparent contempt for the general interest.

Eric De Keuleneer
Economist and professor at the Free University of Brussels

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