The reform of the electricity market continues to divide the countries of the European Union, especially France and Germany. The capitals that are betting mainly on nuclear energy, with Paris at the head, complicate the Spanish presidency’s intention to reach a consensus. Although the prospect is to reach an agreement in two weeks, time is running out to approve the reform of the electricity market before the end of the year.
France presented, together with an alliance of eight countries, a proposal this week with the aim of advancing the negotiations. But the document remains poisoned by the commitment to nuclear energy and extending the life of power plants, despite the fact that countries such as Germany and the Nordics reject it altogether. Paris, along with Poland, the Czech Republic, Hungary, Bulgaria, Croatia, Romania, Slovakia and Slovenia, accepted Madrid’s idea that the lives of existing nuclear power plants could be extended, but completely rejected introducing additional controls.
Spain had introduced the option of these controls to bring positions closer between Paris and Berlin. In particular, he had promoted the idea that a price would be set in case the useful life of the nuclear power plants was extended and they could benefit from the incentives of contracts for difference. With this type of contract, a price guaranteed by the State is stipulated between the buyer and the generator and then the difference is reimbursed based on the actual price. The generator receives a stable income for the electricity it produces. But in return, it would have to agree to a series of controls to avoid market distortions (as requested by Germany, which is also alarmed that an excessive advantage to the nuclear industry to the detriment of renewables will make it even more difficult, if at all, the energy transition). In its proposal, Spain also required that the revenues obtained through contracts for difference be distributed to end customers.
However, the option did not convince either France or its partners in the so-called Nuclear Alliance, who reject practically everything. Starting with the controls, and so they made it known at the meeting that took place yesterday between ambassadors to try to advance the negotiations. They also did not support the issue of sending an accountability report to the European Commission, to monitor whether there are distortions in the EU market and have the power to intervene to limit such aid if necessary; nor that the revenues obtained go to the end customers. France has expressed its displeasure, it considers that its energy mix dominated by nuclear energy is being disregarded and points out that, without funding also for the plants that are already there, its nuclear park is put in danger.
At yesterday’s meeting, the countries discussed the different proposals that the Spanish presidency has been introducing to reach a compromise. Including introducing stricter rules on subsidies (such as the option for the Commission to intervene if necessary), the option to remove rules for subsidies entirely, or put limits on how countries can use the benefits obtained thanks to subsidies. According to European sources, during the meeting, all countries assumed the responsibility that it is necessary to reach an agreement. Next week, the ambassadors will meet again in the hope that the presidency will return with a new proposal that will bring positions closer together and thus give the green light at a meeting of Energy Ministers scheduled for October 17.
But time is running out. The aim is that if the ministers decide on a position in two weeks, negotiations with the Eurochamber will begin as soon as possible and thus the reform of the electricity market will be approved before the end of the year. A much less ambitious reform than initially expected, and announced in the wake of the energy crisis of a year ago. However, diplomatic sources admit that the situation is “difficult” and, although there is a will, not everyone believes it is possible.
The Eurochamber, for its part, voted in September on its position to start negotiating with the states. The protection of the most vulnerable consumers is shielded, so the State will have to explicitly prohibit power cuts and prevent suppliers from requiring this type of customer to pay in advance for the service. It also foresees that in the contracts for difference, in addition to renewables, nuclear energy will be maintained, but that the benefits will go to the final consumers.
