The public goods of recent decades have been very profitable for Electrabel/Engie, but very costly for the Belgian economy and consumers.
In Belgium, electricity producers have been allowed to operate the production system since the 1950s. “regulated monopoly”; a system of public services that allows them to plan long-term investments, avoiding competition and almost all risks. The producers, by agreement, agreed to manage the monopoly they received in the common interest. Costs, tariffs, respect for the common interest and the integrity of the system were controlled “Supervisory Committee” made up of social partners.
Then in the 1990s, private manufacturers merged into Electrabel, and since the 1970s have received permission to depreciate the investment cost of nuclear power plants in an accelerated way, for 20 years, when they had a service life of 40 years, which caused significant additional costs for decades until 2005.
These additional costs were borne by consumers, individuals and SMEs. (large consumers received feed-in tariffs), who were promised by the manufacturers and the control committee that they would “later” benefit from stable and favorable tariffs, which did not materialize, as the consumer saw himself invoicing market price based on gas price.
Believing and asserting that Belgian nuclear power is cheap for the Belgian consumer is a mistake at best…
Yet, the civil risk of an accident is essentially borne by the statewhich is a significant subsidy, and furthermore, nuclear liability is not sufficiently secured. The significant profitability of Belgian nuclear power is mainly used to pass on profits to parent company Engie. (directly and indirectly equivalent to several tens of billions over 20 years).
Thus, believing and asserting that Belgian nuclear electricity is cheap for the Belgian consumer is misleading at best…
How to calculate a pension?
The production of Belgian nuclear energy (between 55 and 60% of Belgian electricity production) represents a “rent” for producers due to its low cost. annuity subject to special taxation.
This pension was calculated by Creg and the National Bank from 800 million to 1.5 billion in 2007-2010and has probably remained at that level ever since, except for a few semesters when some factories failed.
Electrabel’s claims are unreliable as the company has regularly transferred profits to other companies in the Engie group (…) in the past in order to avoid drawing attention to the windfall profits from nuclear power. They even sometimes pretended to be confused …
Taxation was quite low and even decreased under Michel’s government. Exact rental amounts in 2022 and even 2023 are difficult to estimate, as Electrabel/Engie says it has already sold most of its production, which is possible in a very short time anyway.
Corn Electrabel’s claims are unreliablebecause the company has in the past regularly transferred profits to other companies in the Engie group by selling cheap electricity, lucrative gas contracts or through notional interest forTax optimization and not to draw attention to nuclear superprofits. They even sometimes pretended to be confused …
The calculation of the Belgian nuclear rent should in fact also includes the Electrabel/Engie section of the French power station at Chooz. and profitability KO pumping stationtwo investments paid by Belgian consumers through regulated tariffs.
In France, nuclear revenues are treated differently. Nuclear power producer EDF is required to provide consumers with the opportunity to use it through the Regulated Access to Historic Nuclear Power, ARENH system, which allows Retail electricity prices in France will be significantly lower than in Belgium.
Disregard for common interests
The wholesale electricity market is generally mainly influenced by gas prices, and speculation, which also manipulates the price of gas. The use of such manipulated wholesale prices as such for setting consumer prices is unacceptable. abnormalespecially in a country where more than 70% of production (nuclear, wind, hydropower) is historically subsidized by the consumer and offers stable production costs independent of gas prices.
Economist Gert Noels was well prepared in a recent debate with Electrabel/Engie executives to challenge their apparent disregard for the common interest.
If the negotiations regarding the expansion of the two power plants do not concern the determination of the price that Belgian citizens and companies pay for their electricity, these extensions will be mainly for the benefit of Electrabel-Engie. The advantage for Engie would be even greater if, for the “consent” to the extension, they received limitation of their liability in relation to the financing of dismantling and waste management.
The public goodwill of recent decades has been very beneficial to Electrabel/Engie., but were very expensive for the Belgian economy and consumers, who pay tariffs (excluding taxes) that are almost the highest in Europe when they should be the lowest. Consumers who have relied on Electrabel’s assurances of stable future prices and an electricity system managed in the common interest; these guarantees with the active approval of the Federation of Belgian Enterprises (FEB)who dominated the control committee, and state who led them. Economist Gert Noels was well prepared in a recent debate with Electrabel/Engie executives to challenge them in their apparent disrespect for the common interest.
Eric De Koehlener
Economist and professor at the Free University of Brussels.