Fundamental differences between Germany and France on energy policy exploded yesterday in Luxembourg, where European governments failed to reach an agreement on all elements of the proposal put forward in March by Brussels to reform the market community electric
While Berlin strongly advocates the exit of nuclear power, Paris champions its use as energy with low carbon emissions, opposing policies that have resulted in a serious fight for the so-called contracts for difference (CdF), in that a fixed price guaranteed by the State is agreed between the buyer and the generator in order to make calculations later and reimburse the difference, depending 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 reduction divides the Twenty-seven, as requested by Poland to be able to continue subsidizing coal to generate electricity in order to guarantee security of supply and, he argues, to be able to assist neighboring Ukraine. The Swedish presidency of the Council remains determined to get this agreement done before June 30, but otherwise it will pass into the hands of Spain, which takes over on July 1.
For several countries, such as Germany, the application of contracts for difference not only to new investments in renewable energy, but also to existing nuclear power plants, would give an excessive advantage to this industry and ultimately hinder the energy transition, so it was impossible to find an agreement yesterday. “There could have been a way to push for a majority, but I am interested in having the highest possible number of countries, and this results in the interest of the whole EU”, explained the Swedish Minister of Energy, Ebba Bush, when she ended the long negotiating session and forwarded the dossier to the ambassadors. “Here no one 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 gives “a huge gift to Macron” by accepting the inclusion of nuclear energy in this system. “The way in which the countries face the decarbonisation of the economy has nuances”, and this “sometimes generates tensions, but it is not about emphasizing the differences, but about building the foundations for an agreement”. added in statements to the press the third vice-president of the central 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”.
At the same time, the Energy Ministers endorsed the compromise negotiated at the last minute by the Swedish presidency to satisfy France regarding the new directive on renewable energies, the so-called RED III, which raises from 22% to 42, 5% consumption target by 2030. Indeed, the Council already reached an agreement on this issue in March, but Paris has kept it up in the air with last-minute requests on the role of the ‘nuclear energy and the situation of the ammonia industry, requests that clashed with Berlin’s refusal.
The self-styled friends of renewables, a group that includes Germany and Spain, among others, demanded that the renewables target be raised to 45%, compared to the 40% limit requested by the block led by France and which stand out because they have a high percentage of electricity produced from nuclear power in their energy mix. Finally, an intermediate goal has been agreed, 42.5% by 2030, which, according to German sources, is equivalent to installing 17 football fields of solar panels, 16 wind turbines on land and four at sea every day.
At the request of the Elysee, the final text of the meeting indicates the importance of nuclear energy in the European decarbonisation strategy and “recognizes” the difficulties represented by the reduction of the use of hydrogen of fossil origin by in the ammonia sector, crucial for the manufacture of fertilizers and therefore, according to France, for food security. As in the case of the reform of the electricity market, the position of the member states for the negotiation with the Eurochamber, but in both cases the objective is to agree on the legislation during the semester of the Spanish presidency.
