Postponement of the nuclear phase out

On 13 October 2009 the Belgian federal government decided to postpone the nuclear phase out of the three eldest nuclear plants with 10 years. This would mean that in the soon to be adopted new regulatory framework all Belgian nuclear plants will close between 2022 and 2025.

As a favour in return, GDF Suez and Electrabel would have agreed to pay 170 M EUR per annum from 2010 until 2014. The other nuclear market participants (EDF Belgium, SPE and eventually E.ON) will have to pay the remaining 45 to 75 M EUR per annum (until 2014). GDF Suez will also invest in R&D on CCS and nuclear waste, in renewable energy and in energy efficiency.

At the same time, a 'Follow Up Committee' will be installed. This Committee will be composed out of representatives of the nuclear producers, the government and the social partners, and of representatives of the National Bank of Belgium. The main tasks of this Committee will be to yearly evaluate the production costs of nuclear energy and to evaluate the electricity market prices. It will also have to verify that the household prices of all suppliers will in no way be higher than the average of the prices in the neighbouring countries.

The decisions still must be transposed into formal legislation. Nevertheless, some ideas can raise concerns about the development of a liberalised energy market in Belgium and about the position of other market players (will they contemplate building new power plants? will they be able to raise their market share?). From a legal point of view, it remains to be seen whether this decision to postpone the nuclear phase out will stand the test of EU law and of Belgian constitutional law.

In any case, interesting regulatory and legal times lay ahead.

A free English translation of the relevant excerpt from the governmental declaration will be send to you at first request. Please e-mail me.

Transit and the European Commission

No further comment:

The Commission opens infringement proceedings against Belgium concerning its gas transit system

The European Commission decided today to commence infringement proceedings against Belgium as the Belgian Law of 10 March 2009 which lays down exemptions for natural gas transit contracts infringes Community law establishing an internal market in natural gas. Since 2004 under Community law the concept of transit has ceased to exist and all transmission of natural gas is now subject to the setting of tariffs to be determined by the independent regulatory authority of each Member State.

Non-discriminatory third-party access to the natural gas transmission network has become a central aspect of the opening up of the markets to competition. Community law no longer makes any distinction between transmission of gas involving transit of natural gas and the transmission of gas intended for national customers.

Article 2 of the Belgian Law of 10 March 2009 introduces exemptions from the general rules on access to the network for the transit of natural gas and provides for negotiated tariffs which apply for a period fixed by contract. In addition, the law makes it possible to set a fair profit margin for transit which is clearly higher than that applicable to other transmission activities and makes a distinction between existing and future installations.

The Law of 10 March 2009 discriminates between network users carrying on similar activities, a practice which is incompatible with Community law.

Community law concerning the internal market in natural gas provides for third-party access to the natural gas transmission market in order to enable new suppliers to enter the market in a transparent and non-discriminatory manner on the basis of tariffs negotiated between the gas transmission network operator and the regulator and published in advance. Since the markets were fully opened up to competition on 1 July 2007, alternative providers can thus offer to supply potential customers.

In the first phase of the partial opening up of the markets, Community law allowed access to be negotiated between network operators and suppliers, but this has not been possible since 2004. Since then, exceptions to regulated access have been strictly controlled under Community legislation.

CREG seeks the annulment of the 2009 Natural Gas Transit Act

The CREG announced today that it has requested the Constitutional Court to annul the Act of 10 March 2009 (that, as you might recall, modified the tarifary system for new transit activities and that also excluded all pre 2004 transit contracts from the scope of the Second Gas Directive).

The Constitutional Court normally renders its judgement within a year from the lodging of the appeal.

All concerned parties lodged an appeal against the 250M EUR nuclear tax

The federal minister of energy declared today that Electrabel, SPE, EDF and Synatom, have lodged an appeal with the Constitutional Court to annul the act imposing a tax on nuclear producers. This tax, voted in 2008, has a total value of 250 M EUR.

New Flemish government and direct lines, closed distribution systems and private networks

Following the citiworks/Flughafen Halle-Leipzig judgement of the EC Court of Justice (Case C-439/06) and the compromise on the new directives for electricity and natural gas, allowing exemptions for closed distribution systems, the new Flemish Government in the coalition agreement agreed to "pay special attention" to these kinds of private initiatives.

Flemish energy regulator consults the market on proposal for new technical code

The VREG, the Flemish regulator for electricity and natural gas had opened a public consultation on draft amendments to the Flemish electricity and natural gas technical codes.

The proposal aims at:
- Leaving out all reference to direct lines and direct pipelines, and private networks (or closed distribution systems) as these are not yet legally regulated in the Flemish region;
- Submitting all contracts and regulations of the distribution system operators to the review of the VREG;
- Giving sufficient attention to decentralised production;
- Inserting a conciliation procedure.

Energy Undertakings Cannot Hold More Than 24,99% of the Fluxys' shares

On the basis of an act, voted by Belgian parliament last week and amending the Gas Act, at the latest on 31 December 2009 all supply undertakings, electricity producers, electricity suppliers, intermediaries, and affiliated companies of the aforementioned companies cannot hold solely or jointly more than 24,99% of the shares of the natural gas transmission system operator (Fluxys).

Moreover, the bye-laws and statutes of the transmission system operator cannot grant special rights to the aforementioned undertakings.