September 30, 2021
At least three companies have already applied for grants to build new large gas-fired power plants. It appears that the target of 2.3 gigawatts of new capacity has been reached.
As the subsidy auction for new gas power plants closed this Thursday night at 5 pm, at least three companies have announced their participation, reports Le Soir. Eneco thus presented a project to build a new plant in Manage (840 MW), while the chemical company Tessenderlo presented its project for a 900 MW plant in Tessenderlo. For its part, Luminus has presented a project for a power plant in Seraing (870 MW). Spokespersons for the three companies then confirmed the information to our colleagues at Tijd.
The government is targeting 2.3 gigawatts of new generation capacity. The three gas-fired power plants already participating in the auction will collectively fetch 2.6 gigawatts.
However, the Luminus project for a power plant in Ghent (235 MW) was not finally submitted due to the uncertainties associated with obtaining the permit.
The spokesperson for the largest actor, Engie Electrabel, did not want to reveal, for the moment, if and where the company was involved. The company had gas power plant projects in Vilvoorde (870 MW), Amercoeur (320 MW) and Les Awirs (870 MW). For Vilvoorde, the company was still awaiting an appeal decision from Flemish Minister Zuhal Demir (N-VA), after the province rejected an environmental permit.
The winners will be announced at the end of October
The winners of the grant auction will be announced at the end of October. Whoever requests the least support in the auction will actually receive the requested amount, in order to make the project profitable. Therefore, the capacity compensation mechanism (CRM) must ensure that sufficient replacements will be ready when nuclear power plants close at the end of 2025.
The more competition there is, the stronger the bidding for grants will be.
Energy Minister Tinne Van der Straeten is targeting 2.3 gigawatts of new capacity in this first auction to ensure security of supply after 2025. This goal appears to be met, as the Eneco, Tessenderlo and Luminus projects together already they reach 2.6 GW and 2.4 GW. if we take into account the correction factor due to the fact that the plants sometimes stop. Everyone assumes that Engie will be there too.
Even RWE, which wanted to build a gas power plant in Dilsen-Stokkem, did not rule out participating shortly before the auction closed.
The large number of applicants is good news for the consumer. In fact, the greater the competition, the stronger the bidding for subsidies. Competition thus lowers the price of the support mechanism, which ultimately falls on the energy consumer or the taxpayer. A large gas plant can receive grants of up to € 900 million over 15 years.
The diversity of candidates for gas-fired power plant construction also gives Van der Straeten a more powerful weapon to push the entire nuclear plan forward within the federal government. Once the auction results are announced, a valuation will take place in November. If this shows that supply is not guaranteed, or if energy prices rise too high, the government may still decide to keep two nuclear power plants open for longer.
All the companies that participate in CRM have made a bet. In fact, they still do not have definitive certainty about their environmental permits. If they get help but are unable to build due to permitting issues, they will actually be fined.
Tessenderlo is still awaiting a first instance authorization decision from Flemish Minister Zuhal Demir. Luminus has permission in Seraing, but the Tegengas action group has already announced that it will appeal to the State Council. Eneco, for its part, received a new permit at the last minute, just before the CRM auction, but the action groups will also appeal the decision.