The reform of the electricity market continues to choke off the countries of the European Union, especially France and Germany. The capitals that are betting above all on nuclear energy, with Paris in the lead, complicate the Spanish presidency's intention to reach a consensus. Although the prospect is to reach an agreement in two weeks, time is short to approve the electricity market reform 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 bitter in its commitment to nuclear energy and extending the life of the plants, despite the fact that countries like Germany and the Nordics reject it outright. Paris, along with Poland, the Czech Republic, Hungary, Bulgaria, Croatia, Romania, Slovakia and Slovenia, accepted Madrid's idea that the life of existing nuclear power plants could be extended, but completely rejected the idea of introducing additional controls.
Spain had introduced the option of these controls to bring closer positions between Paris and Berlin. Specifically, he had promoted the idea of setting a price in case it extended the useful life of nuclear plants 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 in which the difference is then reimbursed based on the actual price. Thus, the generator always receives stable income for the electricity it produces. But in exchange, it should accept that a series of controls be applied to avoid distortions in the market (as requested by Germany, also alarmed that an excessive advantage to the nuclear industry to the detriment of renewables would make the energy transition even more difficult, if possible). . In its proposal, Spain also required that the income 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 this was made known in the meeting that took place yesterday at the ambassador level 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 this aid if necessary; nor that the income obtained goes to the end customers. France has been displeased, its energy mix dominated by nuclear energy considers that it is being neglected and argues that without financing also the existing plants it endangers its nuclear park.
At yesterday's meeting, the countries discussed the different proposals that the Spanish presidency has been introducing to reach a compromise. These include introducing stricter rules on subsidies (such as the option for the Commission to intervene if necessary), the option of removing subsidy rules entirely or placing limits on countries on how to use the benefits obtained through subsidies. According to European sources, during the meeting all countries assumed responsibility for the need to reach an agreement. Next week, the ambassadors will meet again with the hope that the presidency will return with a new proposal that brings positions closer together and thus give the green light at a meeting of Energy Ministers scheduled for next October 17.
But time is short. The objective is that if the ministers set a position in two weeks, they begin negotiations with the European Parliament as soon as possible and thus approve the reform of the electricity market before the end of the year. A much less ambitious reform than initially expected, and announced with great fanfare in the heat of the energy crisis 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 European Parliament, for its part, voted in September on its position to begin negotiating with the states. It protects the most vulnerable consumers, so that the State must explicitly prohibit power outages and prevent suppliers from requiring this type of customer to pay in advance for the service. Likewise, it contemplates that in contracts for difference, in addition to renewables, nuclear energy is maintained, but that the benefits go to the final consumers.
