nuclear-news

France seeks European subsidies for its nuclear industry – fears “discrimination against nuclear”

France urges swift deal on EU power reform to counter US subsidies Energy minister says bloc will lose out to Biden’s IRA if Paris and Berlin fail to resolve differences over nuclear power.

The US will be the main winner if a Franco-German divide over nuclear power prevents a long-awaited reform of Europe’s electricity market being finalised, France’s energy minister has warned.  Agnès Pannier-Runacher said in an interview with the Financial Times that the sweeping overhaul of EU rules was needed as soon as possible to give businesses visibility on power prices, at a time when the US was luring industry with President Joe Biden’s clean energy subsidy programme under the Inflation Reduction Act……………….

The call comes ahead of a bilateral conference in Hamburg, starting on Monday, between French president Emmanuel Macron and German chancellor Olaf Scholz, accompanied by their cabinet ministers. Energy issues will be high on the agenda because Paris and Berlin have been arguing for months over the EU electricity market reform, specifically over how nuclear energy will be priced and the extent to which it can be subsidised……………

Behind the scenes in recent days, Paris and Berlin have been exchanging duelling policy papers and rewritten clauses for the draft law, while marshalling support from other EU member states.

On this reform and others, France has mounted a pro-nuclear campaign now joined by other countries that use the technology, including Poland and Hungary, in an effort to ensure the sector will be treated favourably.

But its drive has hit roadblocks, particularly in Germany, over concerns France will end up riding roughshod over state aid rules and benefit from lower prices for consumers and industry that other countries cannot match………………………………………………………..

Whether France and Germany will be able to square their differences in time for the next meeting of EU energy ministers on October 17 is unclear. The risk is that the reform will not be done by the end of the year and only become harder as EU parliament elections approach……………………..

The main thing still to be ironed out in the reform is the use of a mechanism known as “contracts for difference” (CFDs) which guarantee a minimum price for energy produced, and whether they should be applied to existing nuclear plants or just new ones. The CFDs have typically been used to incentivise renewable energy projects by guaranteeing revenues for producers, and Berlin has argued they should only apply to new investments.

France’s Energy Minister Pannier-Runacher said French reactors built decades ago required billions of euros in new investments for maintenance and to extend their lifespan and therefore should not be penalised with heavy restrictions around the application of CFDs.

As well as a minimum price, the CFD mechanism allows governments to recover excess revenues if prices jump past a set threshold, raising more questions about how governments then use those funds, especially if they were to be directed at providing further energy subsidies.

France had been happy with an original proposal on market reform put forward by the European Commission in March. But subsequent amendments with more restrictions on the uses of CFDs in a version presented by the European parliament have sparked the pushback. “At a certain stage it amounts to a discrimination against nuclear. We would not be allowed to do in the French system what other countries can [with their energy assets],” Pannier-Runacher said.

October 9, 2023 - Posted by Christina Macpherson | EUROPE, politics international