The Union fails in the attempt to agree on the reform of the energy market
The European Union failed to agree on proposed reforms to its energy market after a last-minute proposal by Sweden, the current president, to extend state support to coal-fired energy.
The outcome of Monday's meeting was expected, as EU members have markedly different attitudes towards coal and its importance in national energy mixes. "For some of us, security means capacity markets," Polish energy minister Anna Moskwa told Reuters.
Poland generates about 70% of its electricity from coal. To diversify production, the country is also building nuclear generation capacity, but this takes time, so it wants to continue with support for fossil energy.
However, the EU has seen differences in state support for wind, solar and nuclear energy, Reuters reported. Some countries, including Germany, the Netherlands and Austria, have resisted the idea of offering fixed-price contracts not only to wind and solar producers, but also to nuclear and other energy producers.
France, on the other hand, is very supportive of the idea, as was to be expected given its enormous nuclear capacity, which generates about two-thirds of the country's electricity.
“This could lead to market distortions, as large parts of the markets may become inflexible, and also to a distortion of the level playing field regarding prices in Europe,” said German Economy Minister Robert Habeck.
On the other hand, the restriction of fixed-price contracts to only a few electricity producers "endangers the objectives of security of supply and consumer protection," said French Energy Minister Agnes Pannier-Runacher .
The reform of the EU electricity market aims to decouple the price of electricity throughout the European Union from the price of natural gas, tying it instead to the price of electricity generated by wind and solar plants.
The idea is to freeze prices in the long term, through energy purchase agreements with companies and so-called contracts for difference with the government, to avoid the spike that European citizens experienced last year.
The profound differences arise from the different political positions of the individual national governments and from the different energy mix pursued by each nation. The latter has different historical reasons and causes nation by nation and no one is willing to make sacrifices, apart from the usual Italy. So agreement is impossible, at least for now, and the ball passes to the next Spanish presidency.
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The article The Union fails in the attempt to agree on the reform of the energy market comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lunione-fallisce-nel-tentativo-di-accordo-sulla-riforma-del-mercato-energetico/ on Tue, 20 Jun 2023 17:07:04 +0000.