Italy withdraws objections to EU power market reform

The EU's proposed reform should “limit the distortions” on the market and “create a true Energy Union” which “efficiently allocates public resources on a European scale,” said Davide Crippa, Italy’s Undersecretary for Economic Development. [Juliao Matos / Flickr]

Davide Crippa, Italy’s Undersecretary for Economic Development, has announced the country’s withdrawal from a seven-country alliance led by Poland, which argued for preserving national sovereignty over decisions to finance emergency power plants.

In a statement published on Thursday (13 September), Crippa said “Italy has decided to withdraw its signature” from a common position signed with six other EU countries, saying it wanted “more time to deepen and, where necessary, reshape its position” on a proposed reform of the EU power market.

The alliance now includes six countries: Poland, France, Hungary, Greece, Ireland and the UK.

The alliance had expressed serious reservations about the proposed reform of the European electricity market. In a joint position paper published last week, the group argued that EU countries “have a fundamental responsibility to maintain security of supply,” saying “it should ultimately be for them to determine whether it is necessary to introduce a capacity mechanism within their own market.”

Capacity mechanisms are national support schemes aimed at remunerating power plants – usually coal and gas-fired – for remaining on stand-by in case of emergency. The European Commission considers them as state aid, and has tabled a reform which is now being discussed as part of a wider clean energy package of legislation, tabled in November 2016.

Germany's 'strategic reserves' for coal under fire in EU Council

A group of seven countries – comprising France, Poland, Italy, Hungary, Greece, Ireland and the UK – have issued a common position on the reform of Europe’s electricity market, saying “strategic reserves” for electricity should not receive favourable treatment from regulators.

The move by Italy is aimed at “avoiding that these mechanisms favour unsustainable power stations from a point of environmental view,” Crippa said. Capacity mechanisms can be envisaged “as a last resort” in order to ensure security of supply, he said, but they should do so in accordance with strict environmental standards.

“We believe that [capacity mechanisms] should be directed to plants that respect, as much as possible, emission standards so as to protect the health of citizens and the environment,” Crippa said in the statement.

Italy, he continued, wants to “limit the distortions” in the internal energy market and “create a true Energy Union” which “efficiently allocates public resources on a European scale” in order to “foster a rapid, coordinated and cohesive energy transition throughout the EU”.

Above all, Italy believes the reform of Europe’s electricity market should not “contravene to the EU’s decarbonisation targets,” Crippa added, calling for an “assessment of the appropriateness of existing mechanisms that are not necessary and/or do not comply with the emission ceilings” defined at EU level.

Environmental groups applauded Italy for its decision, and called on other countries to follow suit.

“We are glad to see Italy withdrawing from the shameful statement made last week by a group of Member States. Now France and the UK must follow suit,” said Nicolas Derobert, a clean energy campaigner at Climate Action Network (CAN) Europe.

“These countries should make it clear that there’s no more acceptance for subsidising coal in the EU,” he added.

Capacity mechanisms reform – key issues to watch

The European Commission wants to limit state aid for power plants that EU countries remunerate to remain on stand-by in case of demand peak. As negotiations on the EU’s new electricity market enter the home straight, EURACTIV lists the main issues to watch out for in the debate.

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