Belgian government to switch off lights, tax energy profits to cut bills

Electric pylons are seen at a combined-cycle gas turbine power plant in Drogenbos, Belgium February 1, 2022 REUTERS/Yves Herman

BRUSSELS, Aug 31 (Reuters) - Belgium announced a series of measures to tackle soaring energy prices on Wednesday, including cuts to public buildings' power consumption and a proposal to tax the excess profits of energy companies such as Engie (ENGIE.PA) and TotalEnergies (TTEF.PA).

Belgian Prime Minister Alexander De Croo said heating in public buildings will be limited to 19 degrees Celsius (66 Fahrenheit) and air conditioning use reduced, while lighting of offices and monuments will be switched off at 7 p.m. Talks will continue to decide on turning off lights on highways and in cities at certain hours.

"If each citizen saves energy when it is possible, their wallet will benefit from it, but also prices will go down," de Croo told a news conference. "Often, we see that small streams become big rivers," he said.

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The federal government also decided to extend a reduced 6% VAT rate for gas and electricity and a special energy rate for the poor until the end of the first quarter of 2023.

It also said it would present by the end of September a proposal to tax the excess profits of energy companies.

Belgium already earns around around 800 million euros ($804.40 million) from a nuclear tax that it wants to extend to other companies in the energy sector.

The nation of 11 million is a natural gas hub, with around 10% of total Russian LNG (liquefied natural gas) exports using trans-shipment services at the port of Zeebrugge. In cold weather, underground gas storage capacity of 9TWh is also available at Loenhout, near Antwerp.

Russia's invasion of Ukraine, which began at the end of February, forced Belgium to rethink plans to rely more on natural gas and stop using nuclear power entirely in 2025.

In July, it reached an initial accord with French utility group Engie to extend the lives of its two newest nuclear reactors, Doel 4 and Tihange 3, by 10 years.

The Belgian government on Wednesday also asked operator Engie to look into postponing the final shutdown of one of its two oldest reactors Tihange 2 to March 31, 2023 at the latest, though Engie said it was impossible.

The EU's statistics office Eurostat said earlier this year Belgium had the highest energy inflation in the EU and that the government in Brussels has only tinkered with taxes and tariffs to alleviate consumer pain.

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Reporting by Marine Strauss @StraussMarine, Charlotte van Campenhout, editing by John Chalmers and Barbara Lewis

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