Fundamental differences between Germany and France over energy policy exploded on Monday in Luxembourg, where European governments failed to reach an agreement on all elements of the proposal presented in March by Brussels to reform the community electricity market.
While Berlin strongly bets on the exit of nuclear, Paris champions its use as a low-carbon energy, opposing policies that have resulted in a serious struggle for the so-called contracts for difference (CdF) in which a price is agreed guaranteed by the State between the buyer and the generator with a view to later calculating and reimbursing the difference, based on the real price.
The destination of these funds, if a specific industry (nuclear, in the case of France) or the consumers themselves to benefit from the price cut divides the Twenty-seven, as does Poland’s demand to continue subsidizing coal to generate electricity in order to guarantee its security of supply and, it argues, to be able to assist neighboring Ukraine. The Swedish presidency of the Council remains determined to reach this agreement before June 30 but, otherwise, it will pass into the hands of Spain, which takes over on July 1.
For several countries, Germany among them, the application of contracts for difference not only to new investments in renewable energies but also to existing nuclear power plants would represent an excessive advantage for this industry and will ultimately hinder the energy transition, so it was impossible to find an agreement this Monday. “There could have been a way to push for a majority, but I’m interested in having as many countries as possible and that’s in the interest of the whole EU,” explained Swedish Energy Minister Ebba Bush, as she concluded the meeting. long negotiating session and forwarded the dossier to the ambassadors.
“Here nobody is giving gifts to anyone, what we need is a design of the electricity market that promotes greater electricity production and is attractive to investors,” Busch responded to the accusation by the Luxembourg minister, Claude Turmes, that it is being done “a huge gift to Macron” by accepting the inclusion of nuclear energy in this system. “The way in which the countries face the decarbonization of the economy presents nuances” and this “sometimes generates tensions but it is not about emphasizing the differences but rather building the foundations for an agreement,” the company added in statements to the press. Third Vice President of the Government and responsible for the Energy Transition, Teresa Ribera, who guaranteed her European colleagues that Spain “will work hard to reach an agreement as soon as possible”.
In parallel, the energy ministers endorsed the commitment negotiated at the last minute by the Swedish presidency to please France with respect to the new directive on renewable energy, the so-called RED III, which raises the consumption target for the year 2030. Actually, the Council reached an agreement on this already in March but Paris has kept it in the air with last-minute demands on the role of nuclear energy and the situation of the ammonia industry, demands that clashed with Berlin’s refusal.
The self-styled friends of renewables, a group that includes Germany and Spain, among others, demanded to raise the renewables target to 45%, compared to the 40% limit requested by the bloc led by France and which stand out for having a high percentage of electricity produced from nuclear in its energy mix. Finally, an intermediate objective has been agreed, 42.5% by 2030, which according to German sources is equivalent to installing, every day, 17 soccer fields with solar panels, 16 wind turbines on land and 4 in the sea.
At the behest of the Elysee, the final text mentions the importance of nuclear energy in the European decarbonisation strategy and “recognizes” the difficulties that reducing the use of hydrogen of fossil origin represents for the ammonia sector, crucial for the manufacture of fertilizers and therefore, according to France, for food safety. As in the case of the reform of the electricity market, the position of the member states regarding the negotiation with the European Parliament, but in both cases the objective is to agree on the legislation during the semester of the Spanish presidency.
