Energy policies: Left versus Right

In response to the reopening of the nuclear power plants of Doel 3 and Tihange 2 there was a debate about Belgian energy between Bert Wollants (NVA) and Johan Vande Lanotte (SPA). The two nuclear power reactors were put offline because of the detection of tiny gas inclusions, but after several investigations qualified safe by the FANC (Federal Agency Nuclear Control). The Green Party was not amused and tried to convince the majority to retire Doel 1 and 2 (the two oldest Belgian nuclear power reactors) now Doel 3 and Tihange 2 will be put online again. Bert Wollants (from the current majority) was not in favor of this idea. Johan Vande Lanotte (current opposition and previous Minister of Energy) believed that now Doel 3 and Tihange 2 would go online again there is enough energy and the two old reactors should be retired.

The debate between the two opponents was interesting because it illustrates well the divide between the previous and current government in terms of energy. One could even say the difference between politically left (SPA) and right (NVA), between one-sided information and realism. Although Wollants was by far the youngest of the two, he was quite knowledgeable about the subject.

I first wanted to translate the complete debate, but settled with the main part that had the arguments.

It started with the question to Wollants what the significance was of this startup (translated from Dutch):

This means that we absolutely will be save this winter, that we don’t have to worry about the disconnecting plan and the strategic reserve. I would say that this is good news for the consumers and for our companies.

I can agree with that. It also made me really curious about what would be the objections and counter-arguments of the opposition. On the question whether this was good news we got this answer:

Well, the fact is that in the past year we discussed a lot in the committee, do we have to extend the life or not and then it was always said, “yes, but we’re not sure about the plants with the gas inclusions, so we should certainly extend. Especially Mrs Dierick of the CD&V has said it very explicitly, I didn’t count it, I should have done that, but it has been said at least a hundred times. We are not sure about the power plants with the gas inclusions, we should extend the life of Doel 1 and 2. The reason is not valid anymore or it was a specious argument. If it is the reason, one must then not extend the life of Doel 1 and 2. Knowing also that Elia (not the opposition, not the majority, but the net manager) said that if you don’t extend the life of Doel 1 and 2, we can ensure a connection with the Netherlands against next summer, so by May next year we can import 1,000 MW. Which is more than Doel 1 and 2 together, that we can import 1,000 MW at competitive prices. So currently there is no reason for Doel 1 and 2.

That is the same argument as the Greens. They understood that putting online Doel 3 and Tihange 2 was the condition to retire Doel 1 and 2. Wollants understood it differently (see further) and as far as I could see in the media, he was right. There were other conditions in play for the retirement of Doel 1 and 2.

Not really sure what he meant by “competitive” prices, as far as I know imported energy is much more expensive than produced by our own.

Wollants wasn’t really impressed:

For next winter that will be the case, but whether this stays this way after the winter, that is another question. Because we know that the capacity in the Netherlands is declining, also in France and in Germany and that these plants also have an effect on the price. Today we notice that we are paying 20% more on the market than for example in the Netherlands and in France and even 40 – 50% more than in Germany. So it has an effect. And if you say: “We can import that power, just close Doel 1 and 2 and we import that power,” then we also need to know what kind of power that we are importing. In our neighboring countries, 64% of the power comes from nuclear and coal. Is that such an improvement to import electricity from other countries and to close these plants here? I am not convinced.

I can agree with that. The problem of shortage is in winter with low production from alternative energy sources and a high demand. I don’t think it is a very good idea to be structurally dependent on other countries that also experience the same problem. The moderator also had that thought and asked Vande Lanotte whether we have to be dependent on our neighboring countries on something as essential as energy. This was the (surprising) answer:

We should not be dependent on that, but we should not want to do everything ourself. We do not do that for petroleum, we do not even do that for gas. We need to have a good mix. Produce some part ourself and import some part. And I am going to respond on this: import means cheaper prices. The price of wind energy in Germany is significantly cheaper than the one we produce ourselves. So if we import it, it is going to have a negative impact and less expensive prices. We are seeing that now, today we can not import enough and our price is higher. And the power coming to Belgium is the surplus wind in Germany, which is very cheap. It is a missed opportunity if we don’t do that. And again, closing Doel 1 and 2 does not mean we have less power, but 200 MW more. We didn’t claim that. It is Elia that says so and if we do not do so, then there must be a reason. We personally think that the MR, the francophone liberals, have not well digested that under the previous government the monopoly has been pushed, that the profits from Electrabel have been skimmed and we see very clearly that the francophone liberals 1. reduce the nuclear tax, so increases the tax for the people, lowers the tax for Electrabel and they want them to give their monopoly back and we find that very wrong. It is not about nuclear power, the issue here is about: we have a market here, we have import possibilities.

His statement that we should not be dependent on import is an empty one. As far as I know, for a couple years we are already structurally dependent on import from abroad during winter. In his solution with more import that would only increase.

This is when my jaw dropped: “import means cheaper prices”… because the wind energy from Germany is cheap!?!? Did he really said? Yes, he did. Although I agree that the price of wind energy from Germany is cheaper than the one we produce, but that is when wind blows and sun shines. As close neighbors, at that time we also produce a lot of alternative energy… Again, the problem is not in times that there is much of wind and solar (in summer), but when it isn’t (in winter). More specifically in the mornings and evenings on working days in winter. At that point there is no sun, little wind and a high demand, also not in Germany. Because price follows supply and demand, high demand with little solar/wind-supply means higher prices. The energy that Germany produces at that moment will not come from solar or wind, but from coal and even lignite.

His claim that “We are seeing that now, today we can not import enough and our price is higher”. He probably forgot why energy prices are so high at the moment and it isn’t the lack of import. Some reasons why it is more expensive: the high cost coming from the over-subsidizing of alternative energy sources (driven to the top by his own party member), the temporary lowering of the VAT and the temporary freezing of energy prices (which were his own proposals),.. Those last two were beneficial on the short term, but problematic on the long term. Many people considered these a diversion from the failing green certificate policy. I do too.

Not sure what to think of the MR story. Seems more like a political game.

Wollants saw the same issue with the “cheap” prices from Germany:

At moments of high wind, this is indeed like that, and at those moments we have the same, so we too have a lot of wind and we therefore have less need for power. But at the moments that are difficult, in the winter, when there is no sun in the evening, then it is necessary to import other power and this will not be wind energy from Germany that is coming to us, but then it will be produced by coal. Because, as you know, this winter the Netherlands was a net importer of electricity. we didn’t see any electricity from gas, we had the electricity from nuclear and coal from France and Germany. And then the question is whether that is a good …

True, most of our import comes from France with a huge share of nuclear power.

But no, that is putting things upside down. The Netherlands was indeed unable to export because the gas plant was closed. It is Maaskant, 10 kilometers across the border, it was inactive because they can not export. Ten kilometers beyond the border there is a gas plant that is not working. Why? They can not come in. That is the same as … I’m going to make a comparison. We do not have enough food, we do not have enough potatoes and there is a pile of potatoes in France and we have no highway to bring it in. That is the situation today. Same at the electricity market. Make sure that we can import from Germany, the Netherlands. We should not depend on it. But today we have a very large arsenal of nuclear power, do not about add two more. Diversify, let them bring it in, please, and what have all those MPs been saying in the past six months? All the time they said, “we have to extend because we can’t trust the plants with the gas inclusions.” Today they say, “They are open and we are going to extend Doel 1 and 2”. Then we have being deceived.

I know that story. There is indeed a gas plant just across the border in the Netherlands. It is not active at the moment and could be connected to the Belgian grid. That would give the 1,000+ MW that we need. But as far as I know the story, it is not that simple as he is trying to paint it.

The potato example didn’t impress Wollants:

In short, the comparison of Mr. Vande Lanotte is not completely right. Indeed, there’s a pile of potatoes, but these are quite expensive and in the meanwhile the Germans throw their power from coal, their cheap promotion bread loaves to our heads and obviously the power comes to us via the Netherlands and it will be this power what it is all about. And besides, the link was never made between Doel 3, Tihange 2 doing and whether or no Doel 1 and 2 would open. Because we have always been very clear that there are other factors. Domestic production, for example. Connection capacity, for example. There are different things that we have to realize and we need to be aware that if we finally open Doel 1 and 2, that our need for strategic reserve, reserve power plants, then we will pay less for that. In 2015, this is over 40 million euro that we have to pay. That is a cost that can be reduced and hopefully disappear within a few years. There are a lot of different aspects to ensure that we are doing a good thing for our families and our businesses price wise.

Vande Lanotte didn’t agree and tried yet another argument:

No, a more expensive price. It is very simple, you know that too. If we only have own production and there is a player with a monopoly, what is almost the case, the price will stay high.

I could agree that a prices are high with a monopoly player. Prices are increasing rapidly recently and it has other reasons than an “almost” monopoly. My impression is that he is trying to distract from the failed energy policies of the past, in which he had a contribution as a former Minister of Energy. At least the current government is cleaning up that mess.

In the end, I was impressed by Wollants. He seems to be focused on energy security and an affordable price. It is also nice to notice that he was knowledgeable and have insight in the issues of our current grid. He was the one that came with numbers and data. Something that could not been said of the opposition.

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