March 4. 2024. 5:03

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Electricity market reform: Paris challenges Berlin on the timetable

Paris wants the EU’s electricity market reform completed by the end of the year, the French energy minister’s office said on Friday (24 February), challenging Berlin’s preference to wait until the 2024 European elections.

EU energy ministers are meeting on Monday and Tuesday (27 and 28 February) in Stockholm for an informal council meeting on energy issues.

High on the agenda will be the reform of the EU electricity market, which faced critique following the decrease in Russian gas supplies, highlighting the market’s limitations in managing price increases.

The European Commission will present a reform proposal on 14 March to make the market more resilient and prevent excessive price fluctuations.

However, neither the principle nor the timetable for the reform has yet reached a consensus among EU member states, particularly between France and Germany.

Berlin has called for waiting until after the European elections in May 2024, while Paris, through energy minister Agnès Pannier-Runacher’s office, reaffirmed on Friday its determination “to reach an agreement before the European elections”.

Following consultation with national stakeholders in the sector, German vice-chancellor and minister for economy and climate Robert Habeck outlined his timetable saying that Berlin’s official position would not be taken until after the winter of 2023-2024.

In Stockholm, Pannier-Runacher is supposed to meet with Sven Giegold, the German state secretary for the economy and climate action, and right-hand man of Robert Habeck.

The two leaders will discuss, among other things, the timetable for the reform.

No electricity market reform ahead of EU elections, Berlin insists

While Brussels works on its reform of the EU’s electricity market, with backing from the likes of France and Spain, Germany is pushing to delay the overhaul until after the 2024 EU elections.

Paris wants a deal by the end of the year

Pannier-Runacher’s office is now calling for the adoption of a “general approach” by the 27 EU member states “by the end of the Swedish presidency” of the EU Council of ministers, which ends on 1 July.

The aim, according to the French energy ministry, is to reach a final agreement with the European Parliament “under the Spanish presidency” of the Council, which ends on 31 December 2023.

“If we do not reach an agreement before the European elections in 2024, the reform will be postponed until much later, while the new institutions are being set up”, explained the minister’s office.

This would be “two to three years after the start of the energy crisis,” the ministry added, urging for an earlier conclusion. Failing to reform this year would result in “wasted time” for Europe’s industry, which needs a rapid reform to avoid “losing competitiveness and relocating” abroad, added the minister’s cabinet.

Germany on collision course with France, Spain over EU power market reform

Three weeks before the European Commission tables its proposal to reform the EU’s electricity market, Germany’s position on the issue is still being fleshed out but initial signs already point to a looming clash with pro-reform countries like France and Spain.

Clash of alliances

In any case, the reform decision “will be taken by the 27”, Pannier-Runacher’s office said, suggesting that a qualified majority in the EU Council – of at least 15 countries representing 65% of the EU’s population – would suffice to adopt a common position.

In this game of alliances, Germany could end up in a minority, according to Luxembourg’s energy minister Claude Turmes, who was speaking at an event in Berlin last week on the EU’s power market reform.

According to him, it is “relatively likely” that France will find at least 14 allies to push through a rapid reform – namely those that got the Commission to cap gas prices last December.

On the other hand, six member states – Luxembourg, Denmark, Estonia, Finland, Latvia and the Netherlands – are already lining up with Germany and calling on the Commission to undertake a cautious reform.

Turmes expects Germany to use “its firepower […], not only from the government but from all players together” to wield more influence.

In response to these demands, the European Commission is expected to propose a reform that includes, at the very least, the points on which there is a relative consensus, such as looser competition rules on the duration of power purchase agreements.

As the Stockholm ministerial gathering is informal, no formal text will be adopted at the end of the meeting.

French electricity union shares EU market reform suggestions

EXCLUSIVE: Lowering electricity prices and offering greater visibility to investors are the two key objectives of the French Electricity Union (UFE) for the upcoming reform of EU electricity market rules, said the union’s president.