The 27 Energy Ministers have not been able to reach an agreement this Monday to close a common position for the reform of the community electricity market. Although a provisional understanding has been reached in two of the three issues on the table, the most delicate, the one that affects the so-called “contracts for difference”, continues to cause problems. Likewise. Likewise, there are countries like Poland that are asking for certain exceptional and temporary guarantees on their energy supply after the Russian invasion and due to a possible need to help Ukraine. The capitals have now commissioned their ambassadors to resume the dossier to try to finalize all the fringes as soon as possible in order to start negotiating with the European Parliament, but that they can achieve it before the end of the month seems almost impossible.
“There are positions that give rise to difficulties and that are not yet clarified. I am optimistic about the possibility of finding common ground, but today, in the first in-depth debate, I was not ripe for there to be a text reflected by the majority,” said the Spanish vice president, Teresa Ribera, who will be the one who has to manage the issue from July 1 and at least until the elections on the 23rd. “This must be managed step by step. The ambassadors leave with a clear vision and go to receive much more precise instructions to build the meeting space, and if they immediately get to work and are well managed, an agreement is possible. Is it probable? It’s not easy”, acknowledged the Spaniard, who has promised to put all her effort into to try before the end of the year what until very recently seemed completely unfeasible.
“There is a general agreement on Remit”, explain sources from the Swedish presidency in reference to the regulatory framework at European level on the integrity and transparency of the wholesale energy market, which was established more than a decade ago and after the deep crisis of the last year must be updated. “And there is an agreement on the directive of the protection of consumers and prices during crises. But not yet on the regulation and the directive of contracts for difference. It will be discussed in the ambassadors but we do not know when,” say the diplomats.
Everything indicates that it will be during the Spanish presidency, which in any case will be in charge of managing the so-called trialogues, the three-way negotiation between the Council (the ministers), the European Commission (which made its proposals in March) and the European Parliament, which He has yet to state exactly his position on the matter.
The fight for contracts for difference (CdF), in which the State agrees with the generator on a fixed price for the sale of electricity within a set period and then the difference is paid depending on whether the actual price has been higher or lower that the stipulated, has marked the day. It is something very technical, but also enormously political and with a very clear clash between Paris and Berlin. In a simplified way, it is necessary to decide whether these contracts apply to nuclear power plants that extend their useful life or expand their capacity, as Emmanuel Macron aggressively fights, or not. For France it is vital and has made it the axis of the entire energy reform for a year, from this part to the so-called taxonomy of the EU, which has ended up accepting that nuclear is considered, with nuances, ‘green’ to be able to be benefit from investments under community programs.
Germany, along with Spain and others, has not yielded this time. And everyone seems to want an agreement at 27 than to take it to a vote. “There are substantive differences. I don’t think they are insurmountable, but it’s not just language in the text. As happened with the cap on gas, I don’t think it makes sense that in something so important, the arithmetic criteria of votes in the Council would suffice,” he said. there is a lack of consensus”, Vice President Ribera said at the end, anticipating what she will probably have to do in the sale in a few weeks. It is not ruled out that for this it is necessary to convene an extraordinary meeting of the ministers, most likely already during the electoral campaign.
Another of the critical points has been that of the so-called capacity mechanisms, coverage systems to guarantee that there will be no blackouts when the renewables are at low production peaks due to lack of sun or wind. To bring Poland closer to the agreement, the Swedish presidency offered that Warsaw could continue to subsidize coal-fired power plants, a point that displeased many countries, such as Luxembourg, which regretted that new coal concessions were introduced “through the back door,” reports EFE.
Commissioner Kadri Simson and several of the ministers have not closed the door on prolonging certain exceptional measures a little longer, understanding everyone’s specific circumstances and the fear of Poland in particular. But they do not believe that the exception can become the norm. Ironically, this is also valid, on the other side of the continent, for the claim by Spain and Portugal, who want the limit on infra-marginal income in times of crisis to be added to the final text, despite the fact that a few weeks ago Brussels already requested officially that the exceptional measures are being deactivated, since prices have fallen to much lower levels than during the emergency last year.
“Poland’s problems have to do with the eastern border and the security of electricity supply or a possible increase in demand to help Ukraine. They seek explicit and automatic support for this proposal, which involves extending the mechanism that provides coverage to the use of coal in its thermal power plants. A solution must be found that gives comfort to the country, but it is also important to maintain without margin of doubt and error that the intensity of Co2 in the use of thermal power plants, set four years ago and who has directed the investment decisions, must be respected”, said the Spanish woman, speaking almost as a mediator and asking that the “coherence of the entire package” be respected.
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