Belgium’s Federal Energy Minister plans to grant subsidies to all electricity producers as part of efforts to encourage the energy sector to increase its non-nuclear thermal production capacity by supporting investors, according to a draft law that Le Soir newspaper was able to consult.
Under the bill, a capacity remuneration mechanism (CRM) would be established in 2020 to support primarily gas-production plants since “at least 3,600 Mw” of additional thermal capacity needs to be installed to offset the closure of the Doel and Tihange nuclear plants, the Elia electricity utility has calculated.
The system would function like an auction: the relevant minister determines the volume of electricity needed over a period of four years – the time needed to build a plant; a call for tender is then launched for the supply of th electricity with subsidies from the State; those who offer to supply the energy for the lowest subsidy are given the contract.
The PwC consultancy firm has evaluated the annual cost of the mechanism at 345 million euros. This would translate into the addition of a new “capacity mechanism surcharge” to electricity bills, which would be included in the Elia tariff, Le Soir wrote.
The office of Energy Minister Marie-Christine Marghem stressed that the bill is a basic text provided by the administration and that a political agreement has not yet been reached. The aim is to reach a consensus by the 31st of May.