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UPDATE 1-Engie's provisions for Belgian nuclear to rise by 1.8 bln euros
December 13, 2016 / 10:11 AM / 8 months ago

UPDATE 1-Engie's provisions for Belgian nuclear to rise by 1.8 bln euros

(Adds detail on provisions)

PARIS, Dec 13 (Reuters) - French utility Engie expects provisions for its nuclear activities in Belgium to increase by up by 1.8 billion euros ($1.9 billion) to cover the cost of decommissioning its reactors and storing their waste.

Engie operates seven nuclear reactors in Belgium through its Belgian subsidiary Electrabel. The company's Synatom subsidiary manages the final shutdown and dismantling of the reactors and the management of their radioactive waste.

Belgium's Commission for Nuclear Provisions (CNP) said in a Dec. 12 report that the discount rate used to calculate the required size of the provisions will be cut from 4.80 percent at the end of 2015 to 3.50 percent at the end of 2016.

This means the nuclear provisions in Engie's accounts need to increase by 1.8 billion euros. Engie said it agreed that the new assessment covers the risks related to the decommissioning of its reactors.

CNP's report followed a review of Synatom's decommissioning provisions, which it conducts every three years.

Engie's nuclear provisions totaled 8.4 billion euros at the end of 2015, of which 3.6 billion was for decommissioning and 4.7 billion for waste management.

Electrabel's seven nuclear reactors in Doel and Tihange have a combined capacity of 5.9 gigawatts and are set to close between 2022 and 2025. Engie said the CNP report takes into account a 10-year extension of operations at Doel 1 and Doel 2.

Engie CEO Isabelle Kocher, who is overseeing a three-year restructuring to focus the group on renewable energy production, gas and distributed energy, has said that it makes sense to extend the lifespan of existing reactors.

Kocher has said that nuclear will remain an important element of Engie's but there was less room now for nuclear power than there was 20 years ago as other technologies had emerged and were increasingly competitive.

Engie has a 40 percent stake in the NuGen consortium to build three Westinghouse nuclear reactors in Cumbria, Britain. Toshiba has 60 percent in that consortium. It is also part of a consortium to build a nuclear plant in Turkey.

Kocher has said that the economic outlook for these projects, for which an investment decision is years away, is not clear right now.

Engie shares were down 0.4 percent in mid-morning trade, slightly underperforming the CAC40 index, which was up 0.5 percent. ($1 = 0.9401 euros) (Reporting by Benjamin Mallet, Sudip Kar-Gupta and Geert De Clercq; Editing by Mathieu Rosemain and Susan Fenton)

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