Subsidies for gas power plants to replace nuclear

Subsidies for gas power plants to replace nuclear
Credit: Belga

Belgian electricity company Elia announced on Sunday the results of its Capacity Reimbursement Mechanism auction, favouring new gas plants from Engie/Electrabel in Vilvoorde and Les Awirs near Liège.

The CRM is intended to ensure the supply of electricity when Belgium’s nuclear power plants close in 2025, according to De Standaard.

Sixteen companies, representing 40 projects, had applied for support in the competitive auction.

“We could count on strong competition, all the major players in the energy sector took part,” said Chris Peeters, CEO of high-voltage grid operator Elia.

“We are on course to secure the energy supply.”

A total of 4,448 megawatts (MW) of capacity will receive that support, a capacity which is considered 'derated,' meaning only the part of the capacity guaranteed to be available when needed is taken into account.

More than half the amount, or around 2,518 MW, will come from existing capacity. The new gas-powered plants can deliver 1,602 MW of capacity.

A complicating factor is that the Vilvoorde plant does not yet have an environmental permit, which would need to be granted by Flemish minister Zuhal Demir, who is not a supporter of gas plants.

In addition to the gas-powered plants, 41 MW of battery farms (in which surpluses of offshore wind energy are stored) and 287 MW of demand management have been included in the support mechanism.

Together, these account for eight percent of the auctioned support. The two Engie/Electrabel gas-fired power plants received 36 percent.

The average price at the auction was €31,600 per MW per year, which is less than half of the maximum of €75,000 per MW per year.

The cost of the support mechanism provisionally amounts to about €140 million, but only 4,400 MW were auctioned, of which 2,500 MW were from existing power plants.

A number of projects are waiting until 2024, when a second auction will take place for delivery in 2025. This means that the total cost will rise.

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