A significant gain but which remains limited

GDF Suez has more to finalize its agreement with the Belgian Government. Monday night, the Council of Ministers officially decided to delay for 10 years the first phase of the nuclear output, which was supposed to intervene from 2015. Especially, counterparties in nuclear electricity producers, in exchange for an extension of the three oldest reactor (Doel 1 and 2, Tihange 1) are now closed. Through their subsidiaries local (Electrabel and SPE), EDF and GDF Suez will contribute to the budget of the State for 215 to 245 million euros per year over the period 2010-2014. GDF Suez will provide the bulk of the effort, with 73 of this contribution. EDF will pay the rest, because of its rights to draw on power plants operated by Electrabel. GDF Suez also should commit themselves to invest 500 million euros in Belgium in renewable energy. For the French group, this announcement marks not strategic failure. GDF Suez has already invested 1 billion euros in renewable energy in 2008 and plans to do the same this year. The Belgian Government, on the other hand, it enables, the day after the European elections, to view a "green voluntarism" good-natured.

Good news

In early September, the CEO of the group, Gérard Mestrallet, had rated EUR 800 million investments in the extension of the old reactors. Once this sum has been disbursed, the latter should report to EUR 1 billion net to the French group between 2015 and 2025. Another positive point, the extension of the nuclear plants will see the outputs of cash needed replacement, and provisioned for decommissioning funds may be reused during the extension period.

In this context, the agreement is good news for the French group. In view of these taxes, the extension of the three Belgian reactors should relate to GDF Suez 600 million euros over the period according to CM - CIC, or 0.30 euro per share gain. More optimistic, Kepler believes that the agreement will increase the value of 0.40 euro title.

A significant gain, but which remains limited. The stock market also reacted with caution to the widely expected agreement. GDF Suez has fallen from 1.30 to 29,60 EUR at the close. In fact, the investors have no visibility on the amount of the tax after 2014. The Belgian Government will set up a follow-up Committee, to evaluate the cost of nuclear energy. It will have to decide the amount of the contributions to the budget of the State after that date.

In the meantime, the Belgium could hardly take another decision to extend the lifetime of its three oldest reactors. Since the vote on the law of January 2003, which provided under pressure from environmentalists for progressive output of nuclear energy between 2015 and 2025, nothing has been done to organize the practical modalities. So it became impossible to respect the calendar without pose serious risks on the energy supply of a Kingdom still dependent for its 55 of nuclear electricity. It is pragmatism that the Minister of energy, Paul Magnette, ruled early October for the extension of the lives of three of the seven reactors in the country. It will also reduce emissions of CO2 and "maintain a price level protecting the purchasing power of households."

Unable to rely on a reduction of energy consumption on the rise in power renewable energy to meet the production deficit caused by the closure of three reactors from 2015, says the report to the Minister by the experts to determine the "mix" energy ideal of the Belgium. Renewable energy not weigh yet only 5 or 6 in the energy mix, even if the Belgium has promised to bring their weight to 13 by 2020.