Europe finds agreement on the electricity market

The Energy Ministers of the Twenty-Seven met in Luxembourg on Tuesday to try to find an agreement on the reform of the electricity market. The discussions promised to be tense to say the least as everyone’s positions diverged. But they finally reached an agreement.

“We reached an agreement which corresponds to the mandate given to me by the President of the Republic. It is a strong response to the American Inflation Reduction Act, which will help protect the European market from the volatility of fossil fuel prices. explains Agnès Pannier-Runacher. The Minister for Energy Transition sees it as a political victory, both for France, which defended its nuclear choice and for Europe, which is equipping itself with a tool to respond to the “Inflation Reduction Act» American.

The agreement reached encourages consumers to choose carbon-free electricity and producers to invest in new low-carbon capacities with the establishment of long-term contracts, which help protect against price volatility on the market.

France scored a decisive point. While at the opening of the council’s work on Tuesday morning, existing assets, and therefore the French nuclear fleet of 56 reactors, were not covered by the text, the final version reinstated them. It will therefore be possible to set up contracts for difference (CFD) on the electricity production of the French nuclear fleet. They also apply to large wind, photovoltaic installations or hydraulic dams. This agreement also aims to enable Europeans to achieve their objectives in terms of reducing greenhouse gas emissions.

“The first victory is political. It provides a competitive market framework for industrial investors, shows that we know how to find agreements with Germany and demonstrates the strength of the European Nuclear Alliance», Adds the minister.

Consensual rules to protect consumers have also been put in place to prevent bills from being multiplied by three or four. In France, consumers will be able to benefit from prices correlated to the reality of the costs of producing their electricity. For the Élysée, it is “a great French victory, which no longer exposes French consumers to the price of gas“. Currently, electricity prices are linked to gas prices.

“This is good news for the French bill, because it will help limit the surge in prices when gas prices, for example, reach peaks internationally.», reacted Agnès Pannier-Runacher on Franceinfo this Wednesday morning, adding that this agreement would “reduce electricity prices on average“. The agreement must also make it possible to “consolidate the European electricity market and secure solidarity between European countries in terms of electricity supply“.

The agreement reached by the energy ministers of the Twenty-Seven must, however, still pass through the forks of the European Parliament. This should take a few weeks or months. However, “in its implementation, it is an agreement for the years to come», Specified Agnès Pannier-Runacher on Franceinfo. “Today, business invoices are for 2024 and often 2025», Indeed indicated the Minister of Energy Transition. Thus, the impact of this agreement will be felt “probably for the years 2026 and following“, she summarized.