The plan designed by Brussels is based on the fact that countries (Germany only) and large companies (all energy employers) demand minor changes and basically continue without imposing the current operating mechanism and without taking retroactive measures; and other member states’ (especially Spain’s) claims of profound and truly structural changes to change the rules.
The European Commission’s is a regulatory proposal that should only happen now. agree with twenty-seven member states and what to do to approve the European Parliament. The most likely wish is to try to reach an agreement and carry out reform before the European elections in May 2024, failing to do so before this deadline and having to wait for the creation of a new college of Community Executive Commissioners will delay reform. much more than anyone would like.
Destination before winter
But the truth is that the European Commission wants to speed up the negotiation work as much as possible and will rush Twenty-seven. getting the reform ready this year, to put the finally agreed measures into effect before next winter, in the face of a possible reversal in the rise in energy prices, as confirmed by official community sources.
“The will is to implement the reform as soon as possible. The aim is to be adopted before 2024 so that if high prices are registered again, it will take effect before next winter,” the Commission sources point out. “And these are deadlines we believe are workable,” they say.
While the Spanish Government argued that a quick agreement for reform should be reached by accelerating the process, the desire of the European Council to reach an agreement on changes during Spain’s second term presidency was pointed out. as much as possible this year. The usual time to carry out a reform of this magnitude in the EU would be two years, but the aim is to shorten the deadlines as much as possible.
diluted reform
The Brussels proposal does not envisage radical changes that generally advocate the preservation of the existing marginal market system (the latest generation technology needed to meet electricity demand – the most expensive – sets the price of others) and limit itself to long-term incentives. term supply contracts at stable prices.
This European Commission advocates facilitating long-term contracts as a way to achieve price stability, but without proposing major changes in regulations to achieve this. On the one hand, the idea is to encourage both c.Bilateral contracts between power producer and consumer (PPA)in industry jargon) with public guarantees or by allocating a portion of new authorization tenders to such contracts to reduce financial risks for signatories.
On the other hand, in Brussels contracts for difference (CfD) through auctions that ensure a stable electricity price by closing the gap with the market, the generator (if the price is higher) or the Administration (if the market price is lower than the agreed price). However, such contracts are for new renewable and nuclear power plants as well as for existing ones (which paves the way for financial support to extend the life of nuclear power plants) . Spain also advocated, in its proposal, the extension of the CfD for all installations, as well as imposing a regulated price for those already retroactively existing and for nuclear and hydroelectric power plants.
The European Commission advocates moderation of its proposal without ending existing market mechanisms that work in the current need to avoid price volatility, but in the absence of exceptional crisis situations. “Revolution may solve your problems during a crisis, but it can ruin everything else”, indicates community sources that negatively show some of the foundations of the Spanish Government’s proposal. “Backward measures create regulatory uncertainty and scare investment”