The reform of the electricity market, at the heart of the nuclear war between France and Germany

2023-07-28 02:00:06

Por France, which must modernize its nuclear fleet, the challenge of the reform of the European electricity market, currently being examined in Brussels, is major. It convinced the Commission to take its imperatives into account – the text on the table attests to this – but it comes up once morest fierce opposition from many of its partners, first and foremost Germany. As for its traditional pro-nuclear allies – the countries of Eastern Europe and Finland – they are now providing it with cautious support. She did try, before the summer break, to gather her camp, but “the blocking minority around France remains fragile”explains a European source.

Read also: Article reserved for our subscribers European electricity market: a reform to limit price volatility and encourage investment

After the spike in energy prices in the summer of 2022, in the wake of the war in Ukraine, the Commission presented a draft law on March 14 to contain the volatility of electricity prices, as soon as ‘it’s decarbonized. This text would allow Member States to subsidize, without contravening State aid legislation, the production of energy on their soil, whether of renewable or nuclear origin, whether existing or future installations. It would also allow them to capture the superprofits of electricity producers when prices soar.

Today, households and businesses pay for the kilowatt-hour at the price at which it is produced in the last power station, often gas-powered, commissioned to meet demand. The Commission is proposing an alternative model which allows them to benefit from the prices of the energy produced on their soil. Thanks to long-term contracts between the producer of carbon-free electricity and the State, the latter would guarantee a fixed price to the former. Under this mechanism, the producer would pay the State the income earned if the price on the market exceeds the guaranteed price, and would receive compensation in the opposite case.

Not the slightest progress

For Berlin and its Luxembourg or Austrian allies, it is out of the question for Paris to finance, with disguised subsidies, its major refit, the renovation program to extend the life of its nuclear power plants. “Berlin is in panic fear that its industry will lose competitiveness. He wants to maintain high electricity prices so that France does not benefit from nuclear power”analyzes a pro-nuclear European diplomat.

Read also: Article reserved for our subscribers In Brussels, the nuclear war between Germany and France is raging

On the other hand, Germany, which is multiplying renewable energy projects, is in favor of the mechanism devised by the Commission making it possible to subsidize the construction of future electricity production facilities. For France’s allies, who do not have a large existing nuclear fleet and above all want to be able to financially support the construction of new power plants, this is the main thing. “Paris risks being isolated in its fight”deciphers a European source.

You have 60.64% of this article left to read. The following is for subscribers only.

1690512243
#reform #electricity #market #heart #nuclear #war #France #Germany