02 augustus 2022
13:29
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Luxembourg steel producers no longer get their electricity from France. Due to the problems with the nuclear power stations, French electricity prices have risen high and Belgian electricity is now more attractive.
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While households and SMEs are cutting their electricity consumption due to high prices, the industry is taking more electricity from the Elia high-voltage grid. It is one of the striking findings in the recent half-year figures from the Belgian network operator. The decrease in households is almost entirely offset by higher consumption by the large industrial customers who tap directly from the Elia grid.
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The explanation lies not in Belgium, but especially in the Grand Duchy of Luxembourg, where the steel industry has made a remarkable switch. Sotel, the Luxembourg power system operator of the steel company ArcelorMittal, has stopped purchasing its power from France since January. The French electricity prices are sharply increased due to the problems with the nuclear park. About half of the country’s 56 nuclear reactors are shut down due to corrosion and maintenance problems. This has pushed French electricity prices to unprecedented records.
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The essence
- Since January, Sotel, the Luxembourg industrial power grid, no longer gets its power from France, but from Belgium.
- Due to problems with the French nuclear power stations, French electricity has become too expensive.
- Sotel mainly supplies the Luxembourg steelworks of ArcelorMittal with electricity, but also a number of other industrial customers such as Paul Wurth, CFL and Climalux.
- Luxembourg industry can purchase electricity directly from the Belgian Elia grid via a connection, which has increased industrial consumption in Belgium.
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Sotel switched to relatively cheaper Belgian electricity. It can get it directly from the Belgian Elia grid in Aubange, in the extreme south of our country, via a connection.
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‘It is a very specific situation that has developed historically’, says Elia spokeswoman Marie-Laure Vanwanseele. ‘The Luxembourg company can obtain electricity in Belgium, France or Luxembourg, depending on the situation in the different markets.’
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Historically industrial net
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The Sotel grid is mainly used to supply power to ArcelorMittal’s steel plants in the south of Luxembourg. But a number of other large industrial customers such as the steel furnace producer Paul Wurth, the Luxembourg Railways (CFL) and the air-conditioning specialist Climalux also purchase their electricity there. Together they arrive at an annual consumption of about 1.5 terawatt hours, comparable to the power consumption of about 430,000 families or 2 percent of the total consumption in Belgium.
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The roots of the industrial network in Luxembourg go back about 100 years, originally with a separate network for industry and one for the banks, so that both would not contaminate each other in case of possible problems.
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In order to improve the supply to the Luxembourg steel industry, an underground high-voltage cable was commissioned in 2013 between Belval in Luxembourg, where ArcelorMittal has a large steel factory, and Moulaine in France. Since then, Luxembourg’s industry has been able to get its power not only from Belgium, but also directly from France, where nuclear energy has traditionally led to low prices.
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The Luxembourg story is a very specific situation that has developed historically.
Marie-Laure Vanwanseele
Spokeswoman Elia
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At the moment, the French electricity prices a bit higher. A company that wants to buy a basic volume of electricity for next year on the wholesale market will pay just over 300 euros per megawatt hour on the Belgian market. In France it is an unprecedented 500 euros. For large industrial customers, the difference between production with Belgian or French electricity can easily run into tens of millions of euros.
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Cross-border grid connections
Traditionally, French and Belgian electricity prices tend to converge due to the many interconnections between the two countries. But the nuclear malaise is far greater than what interconnections can absorb. As a result, French wholesale prices rose much faster than Belgian, already affected by the gas crisis across Europe. In Belgium, a power contract for 2023 became five times more expensive in one year. In France, the price was multiplied by eight.
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The fact that foreign companies such as Sotel can purchase directly from the Belgian Elia network is exceptional, let alone that they can shop where it is cheapest. Elia is proactively investigating whether there is scope to also connect Dutch companies directly to the Belgian grid, should the demand arise now. the Dutch provinces of North Brabant and Limburg the net is saturated.
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