Following the adoption of the EU Council’s position on the reform of the electricity market at the Energy Council on 17 October (see EUROPE 13273/2), the Member States’ ambassadors to the EU and the European Parliament met on Thursday 19 October, for an initial session of inter-institutional negotiations aimed at issuing a reminder of the institutions’ positions. The actual negotiations will start at the second session on 16 November, with the aim of reaching an agreement before the end of the year.
A series of reactions from MEPs followed the Council’s position, including on the part of the rapporteur, Nicolás González Casares (S&D, Spanish). “I was sure that Teresa Ribera [Spain’s Minister for Ecological Transition] could do it today”, he said on X (formerly Twitter).
For MEP Christophe Grudler (Renew Europe, French), a fervent advocate of funding to extend the life of French nuclear power stations, who has previously tried to “weaken” the Parliament’s position (see EUROPE 13248/4), France and Germany have reached “a good agreement”. “I understand that common sense won out in the end”, he said, also on X.
Article 19b governing two-way contracts for differences (CfDs), which has been the subject of controversy for several months, mainly between France and Germany over the competitiveness of their respective industries (see EUROPE 13270/1), and on which the Spanish Presidency of the Council finally reached an agreement on Tuesday, has moved away from the European Parliament’s position.
While the European Commission proposed in March (see EUROPE 13141/1) that direct price support schemes for new investment in electricity production – including existing power stations – should take the form of a CfD, the Parliament agreed that this subsidy scheme should not be compulsory and should only be available for investment in new production capacity, much to the dismay of several pro-nuclear MEPs, including Mr Grudler.
The Council’s position makes CfDs compulsory for investment in new production capacity. However, it responds better to concerns, in particular those of France, which wants to be able to benefit from these subsidies for its existing nuclear assets, by making access to the CfDs possible for investments in existing production capacity (for modernisation, extending operating life or increasing capacity), subject to supervision by the European Commission to ensure that the calls for tender do not create distortions of competition.
In particular, this means that the Commission has the final say on the ‘strike price’ and, therefore, the income generated by these CfDs. As a reminder, if the market price of electricity is lower than the strike price, the electricity producer receives a payment from the State for the difference. On the other hand, if the electricity market price is higher than the strike price, the producer pays the difference.
The Council has also included a derogation for CO2 emission limits, as part of the capacity mechanisms, thus allowing Polish coal-fired power stations to be extended. This derogation was not included in either the Commission’s or the Parliament’s proposal and has been criticised by a number of MEPs.
“We will not accept loopholes for France’s obsolete nuclear reactors and Poland’s polluting coal-fired power stations. These energy sources are outdated”, said co-rapporteur Michael Bloss (Greens/EFA, German).
When asked about possible divisions between Member States as the negotiations continue, Spain’s Minister for Ecological Transition, Teresa Ribera, said on 17 October that “although questions may be raised by Parliament, our task will be to defend the balance we have achieved today, and I do not expect there to be a second round of comments and reopenings”.
To see the Council’s position on 17 October, go to https://aeur.eu/f/95e (Original version in French by Pauline Denys)