The EU energy ministers have agreed on a reform of the common electricity market. In the future, the cost of electricity should become less dependent on the price of gas. The aim is to protect consumers more against fluctuations.
The EU countries want to better protect consumers from escalating electricity prices in the future. To this end, after months of negotiations, the energy ministers of the European Union today agreed on a common position on proposals for a reform of the European electricity market. The agreement now enables talks with the European Parliament to complete the reform.
At the heart of the effort are new long-term contracts between governments and power producers under which the state steps in and makes up the difference if the market price falls below an agreed price. If the price is higher, the surplus goes to the state. In this way, incentives are to be created for the domestic generation of electricity from renewable energies.
The EU wants to protect consumers from wildly fluctuating prices, such as those that occurred during the energy crisis last year. In addition, they and industry should benefit from cheaper electricity production. It is also planned that private individuals will have the right to fixed-price contracts and contracts with dynamic prices.
Dispute between Germany and France
For a long time, the positions of the countries differed widely. When it came to promoting nuclear power, Germany and France were the main contenders. Berlin feared that subsidies for nuclear power could ultimately distort competition in the EU to the advantage of countries with large nuclear power production, such as France.
According to today’s compromise, such aid is now permitted for existing systems. The member states can therefore decide for themselves whether they also want to apply the new funding instruments to existing systems, explained EU Energy Commissioner Kadri Simson after the meeting.
Habeck praises Capacity to act the EU
Federal Minister of Economics Robert Habeck said that Europe had demonstrated its ability to act today: “The agreement improves access for consumers and industry to low electricity prices throughout Europe,” said the Green politician.
The crisis year of 2022 has shown that the European electricity market is fundamentally functioning: “With the new electricity market design, we are now further strengthening the electricity system.” The basis for the compromise is a legislative proposal from the EU Commission from the spring.