The Belgian government has agreed to subsidize new electricity capacity to offset the country's nuclear phase-out in 2025. A capacity remuneration mechanism (CRM) has been approved and is set to replace the strategic reserve program, which was implemented since the winter 2014-2015. A two-tier auction system should be implemented by 2021, to give enough time to project developers to build new gas-fired power plants (based on an average 4-year construction length) before the nuclear phase out of 2025. Both existing and new power plants will be able to participate in the scheme and no technology is excluded except nuclear power. According to the government, foreign capacity may also participate but under well-defined conditions.
The first auction should be organized in 2021. Besides, the government will also organize yearly auctions to adjust fluctuating needs for capacity. This scheme will enable the government to subsidize capacity in a bid to guarantee security of supply. By 2025, the scheme is estimated to cost Belgian consumers an annual €345m. According to a study unveiled by the domestic grid operator Elia, 3.6 GW of new thermal capacity will be needed to offset the closure of the country’s nuclear plants.
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