In a working document on the draft regulation on the electricity market, seven countries (France, the United Kingdom, Italy, Greece, Hungary, Ireland and Poland) suggest that the most polluting power stations could be subsidised for an indeterminate transition period.
“It is shameful to see France, Italy and the UK backing of Poland's desperate efforts to secure subsidies for their coal plants through capacity mechanisms”, said Joanna Flisowska of the NGO Climate Action Network (CAN) Europe, on Friday 7 September. If these countries allow Warsaw to get its way, “coal plants in Europe would continue to receive state subsidies until the late 2030s”.
In the document, the seven countries defend their right to create capacity markets to pay electricity power stations. They are not proposing a date for the end to polluting subsidies, unlike the position of the Council (December 2017), which sets a limit on emissions that will apply after 2025 for new installations (see EUROPE 11929). After this date, these installations will no longer be able to participate in the capacity market.
Additionally, payments to existing power stations should be reduced and then phased out from 2030. These dates are the subject of tense negotiations with the European Parliament, which is the co-legislator on this dossier, and which is calling for these limits to enter into force much earlier.
According to several sources, the working document may contradict French ambitions to be a model in the fight against climate change, with France planning to close down its coal-fired power stations by 2022.
French "cynicism". The MEP Florent Marcellesi (Greens/EFA, Spain), his group's negotiator on the subject, deplored the “cynicism” of the French government: “in public, President Macron calls for an end to coal. But behind the scenes, he is supporting the most polluting power stations in Europe, which are located in Poland”, he told EUROPE.
The working document of the seven countries states that plants that have already entered into contracts before the date of entry into force of the rules on electricity should be allowed to receive payments until contracts expire. Poland has received the Commission's blessing for a ten-year capacity mechanism, with subsidy contracts that may run for up to 15 years, or until 2045!
The seven countries moreover oppose the Commission's proposal to assess the need for capacity mechanisms in the member states. “Member states have a fundamental responsibility to main security of supply. As such it should ultimately be for them to determine whether it is necessary to introduce a capacity mechanism within their own market”, they argue.
These member states also oppose the European Parliament's proposal to promote strategic reserves in order to deal with consumption peaks.
Little progress in inter-institutional negotiations. At the second session of inter-institutional negotiations on the 'electricity market' proposals on Tuesday 11 September, negotiators confirmed their differences of opinion over regional cooperation (see EUROPE 12091).
The Commission's proposals aim to extend regional cooperation to the electricity balancing market as well as elements related to the security of supply (such as the size of capacity reserves), by establishing regional coordination centres with genuine decision-making powers. However, this idea, which is supported by the MEPs, is not making much headway at the Council of the EU, as most member states would prefer decisions on the management of the electricity networks to be made at national level.
The other subjects (such as regulated tariffs) will be discussed in the forthcoming trilogue sessions, with the Austrian Presidency of the Council hoping that an inter-institutional agreement can be reached on this dossier before the end of the year.
Capacity mechanisms on the ministers' agenda. European energy ministers will discuss these capacity mechanisms in the framework of the reform of the European electricity market at an informal meeting in Linz on 17 and 18 September.
The Austrian Presidency hopes to sound them out on a European evaluation of capacity mechanisms and drawing a distinction between strategic reserve and capacity market. The other subjects to be discussed at the informal meeting will include the role of hydrogen in the energy transition. (Original version in French by Lionel Changeur)