The EU is already discussing the electricity market reforms advocated by Spain and France
It is not clear that the European Union is preparing to reform the electricity market. Not surprisingly, it is regulated by community legislation that is barely two years old. But the debate, driven by countries like Spain and France, has been opened and is advancing. Thus, this Tuesday night, at the dinner reported by the EU Heads of State and Government, the matter was put on the table after the discussion on the international role of the EU.
Furthermore, at the time when the leaders were sitting in Brdo (Slovenia), Spain was distributing a document signed with France, Greece, Romania and the Czech Republic with the proposals to reform the European electricity market that have been put forward in recent years. weeks.
Together with ministers from 🇫🇷 🇬🇷 🇷🇴 & 🇨🇿 we sign a joint statement to address the spike of energy prices.
We need a coordinated response to ensure a fair #greentransition. pic.twitter.com/QiMOIurNuq
- Nadia Calviño (@NadiaCalvino) October 5, 2021
"The energy issue has been briefly addressed by a couple of leaders [el Ejecutivo español no confirmaba esta madrugada que uno de los lÃderes que abordaron el asunto fuera el presidente, Pedro Sánchez]"reported a diplomatic source at the end of the dinner," but as we announced earlier, the in-depth debate on energy will take place at the end of October. The President of the Council has proposed to the leaders to address the issue of the increase in energy prices at the next formal European Council, 21 and 22 October, after hearing the communication from the Commission that will be announced shortly. [seguramente el 13 de octubre]".
Meanwhile, some, such as the Finance Commissioner, Paolo Gentiloni, insisted on Monday after the Eurogroup that the measures being prepared by the European Commission are "temporary" and adjusted to the rules of the "internal market and state aid", the president of the Community executive, Ursula von der Leyen, assumed a reality this Tuesday: "We will discuss in the European Council, not only tonight, but in two weeks in the formal Council, how to approach storage, a strategic reserve, and how we see the composition general electricity market prices, which are high due to high gas prices. And we have to study the possibility of decoupling them within the market because we have much cheaper energy, such as renewables. "
In other words, the president of the European Commission assumes two of the debates proposed by Spain and Franca: that the price of gas is not the one that marks the entire price of electricity and, also, think about strategic reserves. Spain also defends the joint purchase of gas, but this issue has not been mentioned by Von der Leyen.
"We have high energy prices because the price of gas is rising dramatically," said Von der Leyen. 90% of the gas is imported. And what is the reason for the increase in gas prices? Economies are recovering, demand is increasing, but supply is not increasing in the same way. We are very grateful that Norway is increasing its production, but it does not seem to be the case, for example, of Russia. And therefore, in the end, in the medium and long term, it is very clear that we have to invest in renewable energy. They are stable in price and good for the short term future. "
Diplomatic sources have recognized that "not all member states share the idea of ​​reserves. The problem is that it is a rather expensive solution: member states are in different positions on whether or not they want to assume the guarantee of strategic reserves. Some are and others don't. And I don't see that this is going to change dramatically. In fact, in terms of strategic reserves we have a smaller number than in previous years. "
Regarding the joint gas purchases proposed by Spain, in the image and. Similarity of those that have been made with vaccines, diplomatic sources explain: "It is one of the proposals that are on the table now. In 2016 a similar proposal was made, and at that time, it did not find sufficient support from the States. Now things can change, and I think it is something worth exploring. My initial feeling is that I am not sure that all Member States support it, so a voluntary approach can be considered. How many Member States are interested in it, but I have heard it from our Spanish colleagues and also from our Italian colleagues, and I know that they have been receiving support from some Member States. It is one of the elements that we look at very closely, but it will be in the longer term for two reasons: it can have an effect on prices if you talk about it too much beforehand and I think in terms of organization it will not be an easy task. "
In this sense, diplomatic sources understand that it is "more likely" that a joint purchase will be reached through coordinated actions than through regulation: "But we want to hear a little discussion from the leaders. That is why it is good. that we have it on the agenda for the summit on October 21 and 22. Member States see the issue quite differently, depending on whether they are in Southern Europe or Eastern Europe or Western Europe. I still don't see a common position, we must prepare so that on the 21st and 22nd there will be a common position ".
