The negotiations with Engie face the weekend of truth. As taxpayers, our children and grandchildren will pay for the billion dollar pill. But it has come to this: An ugly and (very) expensive deal is even better than no deal at all.
Over Christmas and New Year, Prime Minister Alexander De Croo (Open VLD) and the top of Engie, the operator of the Belgian nuclear power plants, are frantically negotiating the expansion of the last two nuclear power plants. Linked to this is the limitation of the future invoice for Engie for the disposal of nuclear waste. Costs exceeding that ‘cap’ would then end up with the government, while Engie is now legally obliged to continue paying for that bailout in full.
The discussion may be long and technical, but it is of vital importance to our society and economy. Indeed, it should be surprising that the very uncertain energy supply does not create even more social controversy in the coming years.
It is surprising that the very uncertain energy supply does not create even more social controversy in the coming years.
The agreement that is now being negotiated is in many ways an ugly agreement.
Ugly, because it will still be an agreement in principle, without a final amount attached to that ‘ceiling’. The principle of extending the last two power plants and a ceiling on the invoice for nuclear waste to Engie will be linked. But from what amount the government assumes the nuclear risk, and how much it will cost in the coming years, is for the coming weeks and months.
Which brings us to the second ugly factor: it’s about a very expensive deal. The agreement, which the government is negotiating with its back against the wall, is about billions of euros in future overspending. It is very important for Paris to get rid of the nuclear costs forever. With Synatom, Engie has a piggy bank of 15 billion euros for this, and soon 18 billion. The ceiling being considered will be around 20 billion euros, it is confirmed. With about 2 billion on top to get rid of the unlimited risk, you see the government taking over a hot potato that can and will cost us billions more. You can’t even blame Engie for playing it hard. The Parisian operator of our power plants is forced to start a technically very difficult project in which he no longer wants to.
How did it come to this? Two decades with no long-term vision of energy, sticking to a nuclear exit for far too long, when people saw that this was unsustainable long before the invasion of Ukraine, and endless political twists and turns are the culprits.
Finally, it’s also an ugly deal because the expansion of the nuclear power plants still means they’ll probably shut down for at least one winter. If the extension is decided, they will not close until the end of 2025 and Engie cannot guarantee that they will reopen before the winter of 2026-2027. For example, our energy supply remains very problematic for at least one winter.
If the Danish Parliament wants to make itself useful: The question arises whether Elia, the body that calculates our security of supply, has not presented the situation too rosy for too long.
How did it come to this? Two decades with no long-term vision of energy, sticking to a nuclear exit for far too long, when people saw that this was unsustainable long before the invasion of Ukraine, and endless political twists and turns are the culprits. But we are where we are. So De Croo has to do everything to close the deal that will never win a beauty award – the understatement of the year. No deal is even worse. Without nuclear energy, the uncertain outlook for electricity shortages will become even darker in the coming years. When the lights go out, everything stops.