Energy Transition

Coal and nuclear leave energy ministers at odds over EU power market reform

Countries fail to agree on extension of Polish coal subsidies and French desire to also grant aid to existing nuclear reactors

Swedish energy minister Ebba Busch.
Swedish energy minister Ebba Busch.Foto: European Union

Energy ministers failed to agree on a wider reform of the EU power market, with Polish support for coal and a French desire to subsidise nuclear power at the core of the disagreement.

The EU plans to reform its electricity market design to make power prices less dependent on volatile fossil fuel prices and shield consumers from the type of spikes seen during the Russia-triggered energy crisis last year, as well as to speed up the deployment of renewables.
As in other areas of common energy policy, France defended nuclear power, with energy minister Agnes Pannier-Runacher according to the Reuters news agency opposing restriction of subsidies for already existing atomic power plants, which she is quoted as saying "endangers the objective of security of supply and of protecting consumers".
France derives over 70% of its electricity from nuclear power, but government-controlled nuclear utility EDF – which the state recently took over 100% – is heavily debt-laden while President Emmanuel Macron at the same time wants to renovate its ailing fleet of reactors and build up to 14 new ones. Both would be near-impossible without fresh tax-payer money.

Germany, which this year has switched off its last remaining nuclear power plants, and like-minded countries such as Austria or Luxembourg, are concerned contract for difference (CfD)-style support for inflexible legacy atomic power could unsettle the EU’s single market.

"This could lead to market distortions as large parts of the markets could become inflexible, and also to a distortion of a level playing field concerning the prices in Europe," German economics and climate minister Robert Habeck is quoted as saying at the meeting.

Ebba Busch, the energy minister of Sweden, which currently holds the EU presidency, surprised the meeting by opening up another contentious issue when she asked to allow for a years-long extension of capacity mechanism subsidies for coal power plants. The measures, she said, could ensure that Poland had stable power generation and could support its neighbour Ukraine with back-up electricity.

While Poland defended the proposal, several western European member states said it would undermine the EU’s climate ambitions.

The power market design will now be agreed upon at a later stage, the EU Council said.

The meeting did reach an agreement, though, over a proposal for regulation on wholesale energy market integrity and transparency (REMIT). The proposal aims to support fair competition by banning trading based on inside information and deterring market manipulation.

The disagreement over the electricity market design came just days after EU ambassadors had reached a deal over a comprehensive reform of the renewables directive (RED) that will hike the bloc’s renewable energy target and perpetuate emergency measures from last year to speed up planning and permits of renewables installations.
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Published 20 June 2023, 07:32Updated 20 June 2023, 08:29
EuropeEUEuropean CouncilRobert Habeck