[ad_1]
Stay informed with free updates
Simply sign up to the EU energy myFT Digest — delivered directly to your inbox.
Germany has given leeway for France to use state subsidies to fund its nuclear power plants, unblocking a long-stalled reform of the EU electricity market in the face of vast state aid regimes in China and the US.
The agreement reached on Tuesday among energy ministers in Luxembourg will mean that France could use government support to finance its largely state-owned nuclear plants, which generate about 70 per cent of its electricity.
Such a move had been heavily contested by Germany, Austria and Luxembourg, which have been historically opposed to nuclear power but also feared that allowing Paris to subsidise its nuclear plants would provide French industry with structurally lower energy prices, giving it a competitive advantage.
As part of the new EU rules for the bloc’s electricity market, France will be allowed to use funding structures known as contracts for difference. These set a minimum price guarantee for power providers, as well as a ceiling above which the state can recover any revenue.
Paris, however, did not obtain a further concession, for the EU to allow revenues from those schemes applied to existing power plants to be refunded to industrial consumers. The Tuesday agreement also gives greater power to the European Commission to assess state aid benefits.
Agnès Pannier-Runacher, the French energy minister, said that the agreement was “a compromise which sets out a balance” that “allows member states to have room for manoeuvre and take action on the basis of their own energy mix”.
German vice-chancellor Robert Habeck said that the reform would give “access for consumers and industry to low electricity prices across Europe”.
EU ministers have been negotiating for months over reforms to the bloc’s electricity market that are intended to provide better investment signals to renewable power developers and secure electricity supply to prevent any spikes in prices.
The proposed overhaul was prompted by the bloc weaning itself off Russian gas after Moscow’s full-scale invasion of Ukraine and after last year’s record-high energy prices across the EU. Investors and policymakers have said that it is crucial to lower prices to keep European industry globally competitive.
Several ministers on Tuesday framed the reform as crucial to the bloc’s response to vast state subsidies for clean power available in the US and China.
“We are in a global competition for our energy intensive industries,” said Claude Turmes, Luxembourg’s energy minister.
One senior EU official involved in the talks said that finding an agreement between member states was “like walking a tightrope”.
The agreement will become law following negotiations with the European parliament, which are due to start on Thursday. It also includes allowances for countries that rely on coal power, such as Poland, which will be able to subsidise those plants until 2028 despite the bloc’s efforts to reduce its greenhouse gas emissions.
Bram Claeys, senior adviser at the Regulatory Assistance Project, an energy NGO, said that the “prolonged discussions” of member states had already been detrimental to new investments in clean energy projects.
“That is a big problem, because those investments can’t stall, but instead need to urgently speed up to tackle the root causes of the energy crisis and the impact that had on the European people and businesses,” he said.
[ad_2]
Source link