Impact of interacting energy policies on power generation in Belgium

This study assesses the impact of interacting energy policies on power generation in Belgium. Focus lies on three interacting policies, i.e. the tax on nuclear power plants, the permits or extension of permits to operate nuclear power plants and support for other types of power generation, more specifically renewable energy. These policies are described from a legal perspective and further analyzed from an economic one. The economic analysis indicates that total electricity production and expected profits increase while electricity prices decrease when renewable energy subsidies (and nuclear tax) are provided and when the probability for extending the nuclear license decreases. Expansion of capacity takes place in renewable technologies when renewable energy subsidies are provided and in non-renewable technologies when they are not. The innovative element in the model is that the suppliers can take a strategic position to influence the market price and the total electricity generation capacity. This is tested against different probabilities of extension of the nuclear production license.