The commission said the CRM will contribute to ensuring security of electricity supply, especially as Belgium has decided to phase out all commercial nuclear capacity by 2025.
The approval follows an in-depth investigation launched by the commission in September 2020 to assess if Belgian plans to introduce the national market-wide mechanism were in line with EU state aid rules.
The CRM, which is intended to replace the Belgian strategic reserve, will select beneficiaries through a competitive bidding process. They will be remunerated for their availability in situations where there is shortage of supply and receive capacity payment for the duration of the agreement, which would range between one and 15 years, depending on the size of investment.
In exchange, the successful bidders will make their capacity available to the transmission system operator during stress events experienced by the electricity system.
Critics have said the decision to phase out nuclear – Belgium’s leading low-carbon energy source – and to finance new fossil gas plants through the CRM is “paradoxical and counterproductive”.
One Belgian MEP submitted an urgent written question to the parliament noting that plans to shut down nuclear plants mean polluting gas plants are needed, which, in turn, will increase CO2-emissions.
“This will make Belgium one of the most polluting energy producers in Europe,” said Gerolf Annemans of the Flemish nationalist party Vlaams Belang (VB).
In his written question, Mr Annemans asked what guarantees the commission has received concerning the sustainability requirements to be imposed on new gas-fired power stations.
He also asked how the commission reconciles its approval of the subsidy mechanism with the closure of nuclear power stations in Belgium and the declarations made by the International Energy Agency that nuclear energy can make an important contribution to achieving sustainable energy objectives and improving energy security. In 2018, Belgium agreed to subsidise new electricity capacity – including gas-fired power – to offset the nuclear phaseout.
The Horizon 238 think-tank said in a letter to prime minister Alexander De Croo that the decision to phase out nuclear must be reviewed with 10-year lifetime extensions introduced for the country’s newest nuclear reactors. The letter, which called on the prime minister to “implement a long-term policy based on figures and facts”, was signed by 100 people from academia, NGOs and industry.
Last year it was reported that Engie Electrabel plans to build four new gas-steam plants, with a total capacity of 2,950 MW by 2025 to cover energy needs in Belgium.
This is approximately equivalent to the production of the four nuclear plants at Doel, which will have been closed by then.
Energy minister Tinne Van der Straeten said recently that gas is an indispensable link on the road to 100% renewable energy.
Belgium has seven commercial nuclear power units – three at Tihange near Liège and four at Doel near Antwerp.
Belgium’s governing coalition said in October 2020 that it would stand by its predecessors’ plans to shut down the nuclear fleet in 2025 on condition that security of supply will not be affected.
A July report by the Federal Planning Bureau warned that Belgium’s planned nuclear phaseout by 2025 is expected to increase the country’s greenhouse gas emissions and energy imports.
The report said nuclear power is expected to supply 35% of Belgium’s electricity in 2023, but the share would plunge to zero at the start of 2026, resulting in increased gas generation and a ‘systematic increase’ in emissions.
As a result, natural gas power generation will compensate for the loss of nuclear power with its share estimated to increase from 19% in 2021 to 28% in 2023 and to 56% by the end of 2025. Renewables are expected to supply 30% of electricity in 2026, up from 26% in 2021.