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French TSO urges clean energy costs decoupled from fuels

02 Feb 2023 11:30



02 Feb 2023 11:30

(Montel) Pending reform of the EU energy market needed to see the decoupling “of the final prices of decarbonised energies from the much higher prices of gas and coal”, said Xavier Piechaczyk, chairman of French TSO RTE.

This would allow nuclear, renewables and hydropower prices to “gradually move towards their [very low] production costs for the consumer”, he told Montel in an interview on Thursday.

Allied to this, he urged “a combination” of contracts for difference and long-term power purchase agreements to “send stable, long-term signals to invest in decarbonised generation”.

Such projects were capital intensive, with wind farms only breaking even after about 15 years and nuclear plants becoming profitable up to 60 years beyond start-up, said Piechaczyk.

Encourage investment
Guaranteeing a stable remuneration over the very long term would effectively help reduce the cost of financing the plants, said the RTE chairman.

This would benefit the financing of the energy transition, the climate and the economy because “the industry and the French people will switch to electricity all the faster if [it] is cheap in a sustainable way”.

His comments came in the light of a European energy price crisis, with consumers facing massive bills prompted by record high power prices due to the skyrocketing cost of gas amid the fallout from the Ukraine war.  

Despite the need for reform, however, “we must not question the fundamentals of the market as it is a very good European system for dispatching electricity, free and without barriers, which automatically guarantees solidarity between European countries and therefore the security of supply”.

“Allowed imports”
Such a system allowed France to import “a lot of electricity this winter”, he added, with the country becoming a net importer last year for the first time in 20 years due to record low nuclear and hydropower output. 

The European Commission plans to present proposals to reform the power market in March. 

France has already called for power prices be decoupled from those of fossil fuels to better reflect its own production mix, which is very low carbon with nuclear and green energy making up 89% of the power mix last year.

The country was also planning to build a number of new nuclear reactors amid a pledge from president Emmanuel Macron. 

This is the second part of an interview with Xavier Piechaczyk

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