2023-10-17 19:17:59
The Twenty-Seven found a compromise on Tuesday, October 17 on a reform of the European electricity market, which provides for the possibility of public support for existing nuclear power plants subject to compliance with EU rules on energy aid. State.
This agreement concluded by the energy ministers meeting in Luxembourg, and which will now be negotiated with MEPs, concludes months of bitter negotiations between France and Germany on support for the atom, at the heart of concerns on industrial competitiveness.
Reduce household and business bills
After the surge in electricity prices last year, the reform intends to reduce the bills of households and businesses thanks to long-term contracts to smooth out the impact of the volatility of gas prices.
The approved text also intends to offer greater predictability to investors by making the use of “contracts for difference” (CFD) for any public support for investments in new carbon-free electricity production facilities (renewable or nuclear).
In this state-guaranteed price mechanism, if the wholesale market price is higher than the set price, the electricity producer must pay the additional revenues earned to the state, which can redistribute them to consumers and industrialists. If the price is below, the State pays compensation.
In Germany, fears of unfair French competition
Paris and Berlin had long disagreed on the conditions required to also use these CFDs for new investments in existing nuclear power plants, intended to extend their lifespan or increase their capacities.
Germany, having left nuclear power, fears competition, which it considers unfair, from French electricity made more competitive thanks to massive public support. Conversely, the subject is crucial for France, keen to finance the repair of its aging nuclear fleet and to maintain low prices, a major asset for its manufacturers.
Finally, the States “have adopted a balanced position (…) States which support investments extending the lifespan (of existing power plants), the use of CFDs will be a possible option, but will not be obligatory”summarized European Energy Commissioner Kadri Simson after the meeting.
Possibility of triggering a crisis situation at European level
But if they make this choice, “they will have to comply with European rules on state aid and the Commission will ensure that such instruments are adequately designed and do not give rise to undesirable distortions of competition and a breakdown in the fairness of competitive conditions on the domestic market »she warned.
The text also proposes measures to strengthen consumer protection and provides, in the event of a new lasting surge in prices, the triggering of a crisis situation at European level allowing States to adopt measures such as price shields for most vulnerable and small businesses.
Another subject was debated: “capacity mechanisms” which allow States to remunerate the unused capacities of power plants to guarantee their continued activity and avoid future electricity shortages. Several countries wanted to be exempt from the planned ecological constraints, notably Poland, wishing to apply this tool to its coal-fired power plants. Finally, the states introduced a derogation from the existing requirements regarding CO2 emission limits but under strict conditions and only until the end of 2028.
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