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France may split from EU on power market reform – minister


29 Aug 2023 15:22

29 Aug 2023 15:22

(Montel) France will reform its power market to protect domestic companies from price volatility on a national level if it cannot achieve its aims in the EU discussions, the country’s energy minister said on Tuesday.

“The European power market reform aims at sending long-term signals. Everybody knows that there is a debate around the place of nuclear energy. I’ll be very clear – if what we want to do on a European level does not work, we will do it on a national level,” Agnes Pannier-Runacher told an event organised by the French employers’ confederation, Medef.

“We’ll protect our businesses against price volatility because that’s the first danger: the inability to predict the context in which investments will be made,” she said, adding that she was “concerned” by the pace of the EU talks.

Spain, as current holder of the EU presidency, took over the challenge in July of brokering an agreement on the European Commission’s power market reforms proposed in March by the end of the year, first among EU countries and then with the European Parliament.

Sticking point

A key sticking point is between France and Germany over the EC’s proposals to allow two-way contracts for difference (CFDs) to be used to extend nuclear power plant lifetimes. 

The minister did not provide details on the kind of reform the government would implement, but added that it would use tools already within the exclusive remit of French authorities.

However, a government official told Montel in June that France was mulling a combination of power purchase agreements (PPAs) and contracts for difference (CFDs) to replace the Arenh regulation governing the sale of French utility EDF’s nuclear output. 

The Arenh regulation, which forces EDF to sell up to 100 TWh of its annual nuclear output to rivals at EUR 42/MWh, is due to expire at the end of 2025.

The government did not need to introduce a new regulation once Arenh ended as it was just “another way of selling our power”, Pannier-Runacher said.

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