Electrabel contends nuclear tax calculation
08 April 2015
Electrabel has described as "confiscatory" the tax Belgium seeks to levy on nuclear power plant operators based on new calculations by the country's electricity and gas market regulator.
The Commission for the Regulation of Electricity and Gas (Commissie voor de Regulering van de Elektriciteit en het Gas, CREG), using its own methodology, has assessed the profits that would be derived from nuclear activities in Belgium. The assessment - conducted at the request of the federal energy minister - follows a similar one performed in 2010.
CREG has calculated that the profit from all the activities of Belgium's nuclear operators - Electrabel, EDF Luminus and EDF Belgium - totalled some €435 million ($473 million) in 2014.
"When it comes to its duties and rights, the company would like to be treated like any other industrial actor. The calculation made today by CREG proves that this is not the case."
Electrabel
Electrabel, part of the GDF-Suez group, noted that CREG has made a number of assumptions in order to assess these revenues. Market prices over the last four years were taken into account in the calculation.
CREG's latest calculation "is four time less than the amount derived from CREG's previous calculation, which Electrabel contested, and it is about half the amount which had been assessed by the National Bank and by Electrabel with respect to the year 2007," according to Electrabel.
In its study, CREG said "the profits derived from nuclear activities are the difference between revenues and costs. The 'nuclear rent' can then be calculated by subtracting a fair remuneration of the invested capital."
According to Electrabel, CREG's latest calculation clearly shows that the 'nuclear contribution' imposed by the government on nuclear operators since 2008 is "confiscatory". It said, "This specific contribution, which is not applied to any other activity sector nor to any other neighbouring country, de facto confiscates all of the supposed nuclear profits, as calculated by the regulator."
Electrabel noted the nuclear contribution amounted to €479 million ($521 million) in 2014 - some €44 million ($48 million) more than the calculated profits. "The nuclear operators are thus paying to the state more than they earn from this nuclear activity," it said.
Electrabel said it operates a diversified power generation fleet in Belgium, but "isolating one technology and one activity from the others does not make sense when assessing the profitability of an entire company".
"No company and no industry in this country has to bear and pay a contribution which applies only to part of its business," it noted. "To impose such a specific regime to part of Belgium power production does not make sense. The contribution and its amount are clearly discriminatory compared with other energy producers and other industries of the country."
In 2008, the government announced that the country's nuclear power plant operators would have to make a one-off payment of €250 million ($271 million). However, a year later it said it would postpone its planned nuclear phaseout but would charge nuclear operators an annual tax of €215 to 245 million ($233-266 million) over the period 2010-2014.
Belgium has two operating nuclear power stations - Doel and Tihange - with a total of seven reactors, which between them produce over half the country's electricity. GdF-Suez operates all seven units through its Electrabel subsidiary. This owns three of the units outright as well as 89.8% of another three (the remaining 10.2% being held by SPE). Electrabel jointly owns the remaining unit with France's EDF. Although a levy against nuclear producers affects all three companies, Electrabel thus bears the brunt of the charge.
Last July, Electrabel said it will reconsider the future of its nuclear activities in Belgium after the Constitutional Court dismissed an appeal over the €550 million ($597 million) contribution levied on nuclear power operators in 2012.
Researched and written
by World Nuclear News