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    France wants electricity to be paid according to each country's costs


    January 26, 2022 - CE Noticias Financieras

     

      Paris, Jan 26 (EFE) - France wants a reform of the European electricity market so that the prices charged to consumers are based on the costs of generation in each country, so that the consequences of each national energy policy are passed on to them. The idea is that "consumers pay electricity at a price similar to the cost of production" in their country, French official sources said Wednesday, who believe that this should not mean a breakup of the single energy market. The sources insisted that the current system "is obsolete" because the price is set by the last gas-fired plant that is activated to cover demand, even though it represents a very small part of generation. In France, gas accounts for less than 5% of electricity generation. "It makes no economic or environmental sense" - they said - because the consumer is being forced to pay gas prices for decarbonized production, such as renewable or nuclear energy, when "he should pay the price of production in each country". The aim would be for the French to benefit from their country's commitment to nuclear energy, which is theoretically cheaper. France has been trying, since last summer's marked rise in electricity prices, to carry out an in-depth reform of the European energy market, with Spain as its main ally, although most countries, including Germany, are opposed. Paris recognizes that "it is a long-term issue" that will not be achieved in a few months, nor will it serve to confront the current crisis. But "it is a priority" and it intends to work "in the long term" to move it forward, the sources added. In recent months, in a political context marked by the presidential elections to be held in April, the French government has put in place several measures to contain the impact of the escalation of gas prices for consumers. These measures, which include in particular a reduction of taxes on electricity but also a containment of gas tariffs, will cost the State coffers 15.5 billion euros. The Minister of Economy and Finance, Bruno Le Maire, considers them indispensable because, as he said today, "the current gas shock is comparable to the oil shock of 1973". If these emergency measures had not been implemented, his department estimates that an average gas consumer would have had to pay 900 euros more and an average electricity consumer between 300 and 350 euros more. Beyond short-term measures, the government is working to implement long-term corrective policies, in particular the aforementioned reform of the European energy market, to increase energy independence, in particular to reduce dependence on Russian gas imports, and to invest in innovation in the field of storage batteries and hydrogen. On this last point, France has committed to a 7 billion euro investment plan to develop the use of hydrogen. EFE ac/rcf / mj

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