While the European Parliament has already adopted its position on the reform of the electricity market (see EUROPE 13226/1) and the European Commission is insisting that negotiations move forward so that legislation is ready by the end of the year or, at the very least, by the end of the legislature (see EUROPE 13245/5), discussions in the EU Council are at a standstill.
In an internal document obtained by EUROPE, the Spanish Presidency of the Council of the EU has proposed a series of amendments aimed at breaking the deadlock in negotiations between Member States on the reform of the electricity market.
However, some sources close to the dossier feel that this proposal is not sufficient, that discussions at a technical level must continue, and are awaiting a formal revision proposal from the Spanish Presidency.
Some also deplore the fact that this proposal does not mention the important subject of debate concerning the limit on CO2 emissions conditioning access to capacity mechanisms which could subsidise certain coal-fired power stations (see EUROPE 13204/1).
The main point of tension, however, concerns State aid in the form of contracts for differences (CFDs) to remunerate existing production capacity, such as nuclear power stations in France.
Some Member States fear that this State aid distorts the balance of industrial competition within the Union. This is the case for Germany, which wants to prevent France from benefiting from its nuclear power stations and selling cheaper electricity to industrial units.
In the Presidency’s proposal, the CFDs are a binding form of direct support scheme and apply to new investments (from 3 years after the entry into force of the reform or 5 years for certain offshore projects) or those that enable the lifetime to be extended or production capacity to be increased.
In order to avoid market distortions, the Spanish Presidency proposes that “the amounts of the remuneration be determined through an open, clear, transparent and non-discriminatory tendering process” and that CFDs revenues for the State also be distributed to energy-consuming companies so as to avoid any distortions.
In addition, the European Commission could decide to limit the distribution of revenues to end customers if it considers that “in a specific case, the redistribution of revenues, as applied by a Member State, distorts the level playing field in the internal market”. (Original version in French by Pauline Denys)