Filenews 12 December 2021 - By Chrysanthos Manolis
On the occasion of recent - continuous - articles in the European and Greek press, regarding the efforts of countries of the European South (in which, however, Cyprus does not participate) to convince the Commission to differentiate the target model in the electricity market, so that the wholesale price of electricity is determined from now on by the real cost of the energy mix and not, many times, from the price of the most expensive producer (!), the picture that will form, sometime in 2022, the Cypriot competitive electricity market takes a clearer shape. It was designed and is currently being shaped on the basis of the EU target model, which has been firing everywhere during the current energy crisis in the countries of the Union, where the wholesale electricity price has multiplied in recent months, driving millions of households into energy poverty and thousands of businesses to the brink of survival.
Two camps have now been set up in the EU. On the one hand, five countries of the European south (France, Spain, Italy, Greece and Romania) and on the other a bloc of nine countries in the European north (Austria, Denmark, Germany, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands). The southern countries, led by France, which has been putting forward a specific proposal for weeks, are calling for the wholesale price of electricity to reflect the cost of the energy mix from now on, while the 9 in the north insist that the EU's energy markets are functioning effectively and that the Commission's toolbox (the measures it has proposed, mainly through a reduction in taxes and charges, to reduce the impact on consumers) is sufficient to contain the problems of large increases in electricity prices.
As the https://energypress.gr/ writes, at the last meeting of the Council of Energy Ministers, in Brussels, it was confirmed that the two groups of states are divided by a gap in approaches and that the northern front dogmatically refuses to discuss any substantial reform of the energy market. In other words, they refused to discuss the French proposal, which also aligns Greece (but not Cyprus, which is preparing to officially enter the competitive energy market in 2022, along the lines of the much-lauded target model), insisting that the market operates competitively and that natural gas must continue to be a shaper of wholesale electricity prices.
The energypress.gr also writes that in a letter from the nine countries on the French proposal, these governments appear to be fully in line with the view of the European regulator ACER and refuse to allow member states to impose their own "fair price", based on the costs of the national energy mix (i.e. to form an average cost price).
According to journalist Giorgos Finticakis, the "nine" argue that, if the French proposal is accepted, the security of supply of European countries will be compromised, since, according to them, by changing the way the wholesale price is set per country, from the most expensive unit, as is currently the case, to an average cost of the energy mix, a large number of participants (producers and production) will be "thrown out" of the market, who will no longer be able to recover their investment costs. The fact, according to the same understanding of things, carries risks of exit from the market and discourages new entrants.
The "nine" also argue that the proposal of southern countries will increase the cost of integrating renewables production in the long term, as the signals they will receive from the market will not be enough for the required flexibility options. Finally, they consider that the French proposal undermines the single market, as the possibility for member countries to impose the logic of their own 'fair price' may discourage the trading of electricity, thus limiting the ability of states to mitigate price and system crises through cross-border trade in energy with neighbouring countries.
The letter from the "nine" also states that "they cannot support any measure that conflicts with the internal gas and electricity market, as this would undermine cost-effective decarbonisation and jeopardise security of supply"." In their letter, they insist on the Commission's toolbox to contain the increases, and that these should be addressed by targeted national measures. They share ACER's analysis that market design provides sufficient tools to normalise volatility, but above all they stand by the need to increase cross-border capacity and trading in order to increase competition. Any reform of the wholesale market would mean reversals in cross-border trade, which is why they do not accept it.
The same publication states that the French Government's proposal was drafted because it sees, on the one hand, the now private EDF making excessive profits from the production of nuclear energy and, on the other hand, popular dissatisfaction with expensive tariffs growing, which is why it wants to price, in essence, the selling price of nuclear energy produced.
The nuclear dispute
Related to the issue is a telegram from the ANA last Friday, according to which Germany will continue to oppose the French plans, which aim to consider as "green energy" the electricity produced by nuclear energy, as the German new foreign minister, Analena Berbok, said in Paris. "It is known that we have different positions on the nuclear issue," Berbok said after meeting with French Foreign Minister Jean-Yves Ledrian.
According to the ANA, a day after she was sworn in as a member of the new German coalition government, Berbok underlined the great importance of German-French relations for the European Union. It also welcomed France's plans to hold a conference on the future of Europe, after assuming the rotating presidency of the Council of the European Union, at the beginning of next year.
There is a debate going on in the EU to have a common language to direct investment towards programmes that are considered environmentally sustainable. France, along with Poland and the Czech Republic, aim to classify nuclear energy as 'green' (which is not considered polluting), while Germany, Austria and Luxembourg oppose this idea. France produces most of the electricity it consumes from nuclear energy.
It is important to mention that German Chancellor Schultz leads a tripartite governing coalition, his Social Democratic Party (SPD), the Greens and the liberal Free Democrats (FDP). Berbok is one of the two leaders of the Greens, a party that has been and remains vehemently against nuclear power since its creation.
Germany's recent tender is also successful
A total capacity of 510 MW was awarded in the last tender for photovoltaics held in Germany. According to the Federal Network Agency, the PV tender for the first part of the bids, with a deadline of November 1, 2021, was "significantly oversubscribed."
In particular, approximately 232 tenders with a total capacity of 986 MW were submitted, of which 133 bids with a total capacity of 510 MW were accepted and "passed".
Most of the power awarded is in Bavaria, with 255 MW (69 successful bids), followed by the Maclenburg-western Pomerania regions with 51 MW (9 bids) and the state of Baden-Württemberg with 49 MW (10 bids).
For the first time, tenderers were able to submit tenders for arable and grassland in Lower Saxony and Saxony following the approval of the new land plan by the competent authorities in the above Länder. However, no bids were submitted for the above areas.
Most of the increments for arable and grasslands related to tenders submitted for the Bavarian region (172 MW and 41 increments).
The average price of the tender was set at 5.00ct/KWh while the bids ranged from 4.57ct/KWh to 5.20ct/KWh.
The next competition is expected to take place on March 1, 2022.
(from energypress.gr)
