The EU countries want to better protect consumers from escalating electricity prices. After months of negotiations, the energy ministers in Luxembourg agreed on a common position on proposals for a reform of the European electricity market, as the countries announced. The agreement now enables talks with the European Parliament to complete the reform.
The project aims to protect consumers from wildly fluctuating prices, such as those that occurred during the energy crisis last year. In addition, they and industry should benefit from cheaper electricity production. It is also planned that private individuals will have the right to fixed-price contracts as well as contracts with dynamic prices, as the announcement shows.
At the heart of the effort are new long-term contracts between governments and power producers under which the state steps in and makes up the difference if the market price falls below an agreed price. If the price is higher, the surplus goes to the state. In this way, incentives for the domestic production of clean electricity are to be created.
For a long time, the positions of the countries differed widely. Germany and France in particular faced each other. Berlin feared that a provision in the new regulation allowing subsidies for nuclear power could ultimately distort competition in the EU to the advantage of countries with large nuclear power production, such as France.
Federal Economics Minister Robert Habeck told the news agency that Europe had demonstrated its ability to act. “The agreement improves access for consumers and industry to low electricity prices across Europe.” The crisis year of 2022 has shown that the European electricity market is fundamentally functioning. Despite great burdens, it was possible to guarantee the electricity supply in one of the biggest electricity crises in European history. “With the new electricity market design, we are now further strengthening the electricity system.”
