STOCKHOLM — Spain and the Netherlands have backed a rapid deal on an upcoming revamp of Europe’s electricity market, as countries seek to reduce power costs and help their industries compete in global markets.
European Union countries’ energy ministers are meeting in Stockholm on Monday to debate the upcoming plans, which aim to tweak the market to stop short-term swings in fossil fuel prices from wreaking havoc on European consumers’ energy bills.
However, the plans have already stirred disagreement among EU countries on how far to reform the market – with Spain among those calling for substantial changes to align the system with Europe’s shift to green energy, and the Netherlands in the camp of countries wary that major upheaval could deter much-needed investment in the energy sector.
“Timing is key. And sometimes, not being in time is a disaster,” Spain’s Energy Minister Teresa Ribera told Reuters on the sidelines of the EU meeting, adding reforms should be agreed before European Parliament elections in mid-2024.
Ribera said the reform could form part of Europe’s response to the United States’ huge Inflation Reduction Act package of subsidies for green industries.
“For the time being, the single element that makes the highest difference in terms of competitiveness between the US and Europe is the cost of energy,” she said.
Negotiations on major EU legislation, which require approval from EU countries and the EU Parliament, can take two years – sometimes, more. The European Commission will propose the reforms next month.
The Netherlands, although wary on the depth of reform, agrees on the need for speed.
“I’m very much in favor of a strong and fast process to make sure that this reform is delivered this year,” Dutch energy minister Rob Jetten told Reuters.
In the EU’s current electricity market, gas plants often set the overall power price. Soaring gas prices last year pushed up European power prices to record highs.
Spain and France want the reforms to help countries sign more long-term fixed-price contracts with low-carbon power plants, creating a more stable price that would feed into consumer bills.
Jetten said countries agree on the overall aim to shift to a low-carbon power sector but he warned against rules that would force states to structure their power markets in the same way, for example by obliging them to impose fixed-price “contracts for difference” schemes on power plants.
(Reporting by Kate Abnett, Editing by Charlotte Van Campenhout and Sharon Singleton)