EU Member States Fail to Reach Deal on Power Market Reform

Ewa Krukowska and Ania Nussbaum
·2 min read

(Bloomberg) -- European Union members have failed to reach an agreement on power market reforms, kicking discussions to the second half of the year.

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It wasn’t possible on Friday to break a deadlock over subsidies for nuclear energy in proposals, according to people familiar with the situation. The spat is mainly between major nuclear power France on the one side and Germany on the other.

The market reform has already been long-delayed by haggling and the rift shows how difficult it is now for Europe to agree on changes that were an urgent call during the worst energy crisis in decades. Talks will be prolonged as Europe heads into the next heating season.

The EU is overhauling its economy as part of the ambitious Green Deal strategy to reach climate neutrality by 2050. At the same time, it’s seeking to boost energy security after losing access to Russian gas — a major source of fuel — since the war.

Part of that is a reform is to the bloc’s power market, but it’s been strung out as member states seek to defend their interests as each has a different power mix and industries to protect.

The Swedish presidency has failed to find agreement and now it will pass to Spain, which takes over next month.

The main point of contention is how revenues from contract-for-difference subsidies can be used, and whether they should extend to prolonging the life of existing nuclear plants. Contracts-for-difference work by setting a strike price for power generated. If the market price is higher, the operator pays back the excess profit to a central body or government. If the traded price is lower, the generator gets a top up.

Read: EU Seeks to Resolve Deadlock on Power Market Reform on Friday

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