London (Platts)--27Nov2012/748 am EST/1248 GMT

Belgium's dominant power firm Electrabel has attacked the government's decision on Monday to apply a tax on nuclear generation of Eur550 million for 2011 and Eur475 million for 2012.

Electrabel, a subsidiary of GDF Suez, will review procedures to protect its rights, it said in a statement, without detailing any specific legal action.

The nuclear tax, which forms part of the budget for 2013 and will be voted upon by the country's parliament in the coming weeks, falls mainly on Electrabel as it controls most of Belgium's 5.9 GW of nuclear capacity.

The Belgian government had already indicated it would double the annual tax on nuclear power to Eur550 million for production in 2011, and the Cabinet agreed Monday to reduce this figure to Eur475 million for this year due to continuing unplanned outages at Electrabel's 1 GW Doel 3 and 1 GW Tihange 2 reactors.

"GDF Suez believes this unilateral decision is contrary to the protocol signed on October 22, 2009 between the Belgian state and GDF Suez... which set out a fee of between Eur215 million and Eur245 million for 2010-2014," Electrabel said in a statement.

The fee of Eur550 million for 2011 -- on which the amount of Eur475 million for 2012 is based -- "does not relate to any economic reality and does not take into account the severe deterioration of Europe's electricity markets, or the unavailability of the Doel 3 and Tihange 2 units these last six months," the company said, adding that the government's decision sends a negative signal to potential investors in Belgium.

Electrabel has been in many public disputes with the Belgian state and energy regulator CREG, which is keen to wrestle market share from the former monopoly and encourage new market entrants.

Electrabel's profits have been dented by the unplanned outages of the Doel 3 and Tihange 2 reactors, which have been offline since the summer after faults were found in the reactor pressure vessels.

Electrabel requires a green light from nuclear watchdog FANC before it can restart the reactors. FANC is expected to give its verdict in mid-January, which would mean the reactors are unlikely to return to the grid before the start of February.

Also Monday, the government fleshed out the details surrounding a nuclear phase-out plan announced in July.

Belgium's oldest reactors -- Doel 1 and 2, both of which have a capacity of 430 MW -- are to be closed in April 2015, while the 960 MW Tihange-1 unit will remain in service until 2025.

Market participants are set to be offered 1 GW of nuclear capacity in a push to improve market competition and reduce prices to consumers.

--Robin Sayles, newsdesk@platts.com

--Edited by Jonathan Fox, jonathan_fox@platts.com

Similar stories appear in Nucleonics Week. See more information at http://www.platts.com/Products/nucleonicsweek