中文
On October 17th,the European Energy Ministers’Meeting held in Luxembourg reached an agreement on the reform of the European electricity market,with the aim of limiting price fluctuations and encouraging investment in low-carbon energy.
After months of negotiation
The French newspaper Le Monde reported that the meeting between French President Macron and German Prime Minister Schultz in Hamburg on October 9th and 10th seemed to have solved the problem of months of stalemate and hopeless compromise between the two countries:just ten days ago,due to differences between Paris and Berlin,European electricity market reform seemed to have started poorly.
This agreement was reached,and the Elysee Palace called it”a victory for France”.Indeed,France and Spain have been calling for reforms for two years so that households and businesses can benefit from the relatively low production costs of nuclear and renewable energy.
Other countries,led by Germany,are more reliant on natural gas and do not want to touch established mechanisms to ensure supply security.But the Ukrainian war and the resurgence of inflation have changed the balance.The Inflation Reduction Act in the United States has widened the competitive gap between American and European companies,making it necessary to respond to the bill.
The 27 EU countries are now encouraging low-carbon energy producers to sign long-term contracts with industry or governments.The key lies in determining prices in advance,enabling consumers to consume smoothly and providing suppliers with predictable income.
The discussion mainly focuses on Contracts for Difference(CFD),which will involve public institutions:if the wholesale price is lower than the price set in the CFD,power producers must pay the additional income earned to the state,which can be used by the state to help households or industries;If the price is lower than the price set in the contract for price difference,the state will pay compensation.
For future facilities,whether renewable or nuclear,price difference contracts must be used.However,for existing nuclear facilities,the problem is even more complex.Germany,which abandoned nuclear energy after the Fukushima nuclear leak and still heavily relies on fossil fuels,has many concerns,such as concerns that France will provide funding for the overhaul and lifespan of its reactors in this way,and concerns that the electricity prices provided by the state subsidized French power company will attract German power plants to relocate to France.
After several months of struggle,Berlin and its allies were able to decide on whether to use price difference contracts for existing equipment on their own.The Elysee Palace insists that all French nuclear power plants can be considered for use.Most importantly,it will be regulated by the European Commission.
Achieving a Balanced Compromise
The Elysee Palace stated that”the committee will evaluate the sincerity of the price set,which provides Germany with a certain amount of guarantee.”Paris also stated that for existing nuclear power plants,”the guarantee price will be equivalent to the production cost of nuclear power,which is 60 euros per megawatt hour.Considering the cost of major repairs and a little extra fees,”this”will have the potential to avoid a surge in energy prices.
German Economy Minister Robert Habeck commented,”This agreement improves the opportunities for consumers and businesses to access low electricity prices throughout Europe
The text also stipulates that if there is a new sustained surge in prices,as part of the crisis mechanism,governments can easily adopt tariff protection measures to protect vulnerable households and businesses.In order to ensure supply security,the text also authorizes countries such as Poland that heavily rely on coal to subsidize this energy source before 2028.