France under pressure to compromise in EU electricity market talks

(EurActiv, 13 Oct 2023) As France and Germany negotiate a joint agreement to resolve differences over the EU’s proposed electricity market reform, Spain, which holds the EU’s rotating presidency, presented a new compromise proposal on Wednesday (11 October), which seems to put Paris’ back against the wall.

The European Commission tabled the electricity market reform proposal in March 2023 in a bid to contain rising power prices caused by the Ukraine war and decreased supplies of Russian gas.

But what was supposed to be a quick process has ended mired in debates about state aid for power generators.

Paris wants to apply two-way Contracts for Difference (CfDs) to finance the lifetime extension of its 56 existing nuclear reactors as part of the reform, in line with the European Commission’s original proposal.

That move is resisted by EU countries like Germany and Spain, who are engaged in a transition to 100% renewable electricity and fear it will give French industrialists an unfair competitive edge by opening the floodgates to abundant, cheap nuclear power.

CfDs would also have the advantage of replacing France’s much-decried ARENH system, which regulates the sale of electricity from the country’s historic nuclear fleet and is due to expire on 31 December 2025.

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EurActiv, 13 Oct 2023: France under pressure to compromise in EU electricity market talks