The plan designed by Brussels is more in line with the theses of the countries (singlely Germany) and the big companies (all the energy employers) that asked for minor changes and essentially maintain the current operating mechanism without impositions and without retroactive measures; and it moves away from the claim of other member states (especially Spain) of deep and truly structural changes to change the rules.
That of the European Commission is only a proposal for a regulation that must now be agree with the twenty-seven member states and what should approve the European Parliament. The most possible aspiration is to try to have an agreement and carry out the reform before the European elections of May 2024, not achieving it before that deadline and having to wait for the constitution of a new college of commissioners of the Community Executive would delay the changes much more than anyone wants.
Target, before winter
But the truth is that the European Commission wants to speed up the negotiation work as much as possible and will hurry the Twenty-seven to have the reform ready this year, to have the finally agreed measures in place before next winter in the face of a possible return to the escalation of energy prices, according to official community sources.
“The will is to implement the reform as quickly as possible. The objective is to adopt it before 2024, so that it enters into force before next winter in case high prices are registered again ”, sources from the Commission point out. “And they are deadlines that we believe are feasible,” they say.
The Spanish Government has also been defending the need to reach a quick agreement for the reform by accelerating the process, and the aspiration to close an agreement on the changes during the Spanish Presidency of the European Council, during the second semester, has been pointed out as feasible. of this year. The usual terms to undertake a reform of this magnitude in the EU would be two years, but the aim is to shorten the terms as much as possible.
watered down reform
The Brussels proposal does not contemplate radical changes, defending maintaining the current marginalist market system (the latest production technology necessary to cover the demand for electricity -the most expensive- marks the price of all the others) in general and limiting itself to promoting long-term supply contracts at stable prices.
The European Commission defends facilitating long-term contracts of energy as a way of giving price stability, but without proposing major changes in regulation to achieve it. On the one hand, the idea is both to encourage cBilateral contracts between power generator and consumer (PPAin sector jargon) with public guarantees to reduce the financial risks for the signatories or reserving a part of the auctions of new power to this type of contract.
On the other hand, Brussels is also committed to promoting the contracts for difference (CfD) through auctions, which allow a stable electricity price by covering the difference with the market, the producer (if the price is higher) or the Administration (if the market price is lower than the agreed price). But reserve this type of contract for new renewable and nuclear plants, and also for the repowering of existing ones (which paves the way for financial support to extend the life of nuclear power plants) . Spain also defended in its own proposal the extension of the CfD but for all facilities, also those already existing retroactively, and imposing a regulated price for nuclear and hydroelectric plants.
The European Commission defends the moderation of its proposal in the current need to avoid price volatility but without ending the current market mechanisms that work when there are no exceptional crisis situations. “Making a revolution can solve your problems during a crisis, but it can break everything else”, indicate community sources, who point out as negative some of the bases of the proposal of the Government of Spain. “Retroactive measures create regulatory uncertainty and scare away investments”