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2023-06-21
Energy ministers from the European Union's 27 member states failed to agree on the bloc's electricity market reform during their meeting in Luxembourg on Monday due to disagreements over subsidies for backup coal power generation and the lifetime extension of existing nuclear power plants.
The reform, put forward by the European Commission in March, aims to avoid a repeat of last year's energy crisis, when EU consumers suffered from soaring energy bills.
The reform seeks to lower consumer bills by relying less on short-term markets and promoting instead long-term contracts with renewable energy producers providing electricity at lower costs.
The Monday meeting was aimed to find an agreement before the upcoming negotiations with the European Parliament in order to make it into law before the next winter season.
However, the talks had been complicated by Sweden's latest proposal to allow countries such as Poland to prolong capacity mechanism subsidies for coal power plants that pay generators to keep capacity on standby to avoid blackouts. Sweden is holding the rotating presidency of the Council of the EU for the first half of this year.
'Difficult negotiations'
"Long and difficult negotiations on electricity market design today," Swedish Deputy Prime Minister and Energy Minister Ebba Busch told reporters after the meeting.
"We have successfully agreed on two out of three parts of the electricity market design package."
Commenting on the coal proposal, Busch said that ensuring Poland, which borders Ukraine, has stable power generation could help it support Ukraine with backup power.
"It has great importance for the Ukrainian energy system," she said.
Under the Swedish proposal, Poland, which generates about 70 percent of its power from coal, could prolong its support scheme for coal power plants potentially until 2028.
But member states such as Belgium, Germany, Austria and Luxembourg opposed the proposal. They argued that such a move would undermine the EU's goals to fight climate change, referring to the EU's ambitious goal to become the first climate-neutral continent by 2050.
Meanwhile, France and Germany are at odds with each other over existing nuclear power plants. France was looking at contracts to support the lifetime extension of its existing fleet of nuclear power plants, but Germany is firmly against it.
Ambassadors from EU member states will continue to hold talks next week in the hope of reaching an agreement as soon as possible.
Agencies contributed to the story.
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