EU energy ministers have railed against an effort by Poland to extend subsidies for coal power plants until 2028 as they gather to agree an overhaul of the bloc’s energy market.
Sweden, which at present chairs the EU’s rotating presidency, has allowed an exemption to be added to a reform of the bloc’s energy market at the request of Warsaw. This exemption would permit coal power plants to receive state support for providing a steady flow of energy when other forms of energy were not available — a move that was promptly criticised by multiple ministers.
Claude Turmes, Luxembourg’s energy minister, described the proposal as “really astonishing” and amounting to a “weakening [of] our climate policy”.
Teresa Ribera, Spain’s minister for ecological transition, said that some “comfort” had to be given to Poland, which relies on coal for about 70 per cent of its energy mix, but that policymakers should not give “contradictory signals to the market”.
Robert Habeck, Germany’s vice-chancellor and minister for energy, told journalists that the exemption was “wrong [and] not compatible with the climate protection goals of the European Union”.
“It’s not that coal power plants should not run . . . this counts as well for Germany but to give them an extra subsidy system goes too far,” he told fellow ministers at the start of the EU energy council.
Coal provides about a quarter of Germany’s energy.
The exemption requested by Poland would extend allowances for EU member states to subsidise fossil-fuelled power plants with emissions above a limit at present set at 550g of carbon dioxide per kilowatt of energy produced until 2028. The subsidies, known as capacity mechanisms, are designed to ensure that countries have stable energy at all times.
The state aid scheme is seen as important to the clean energy transition in the short term while more stable storage for renewable power, which relies on intermittent sun and wind, is developed.
But electricity executives warn that paying carbon-emitting power plants suppresses incentives for the rollout of energy storage or other climate-friendly measures.
The proposed exemption should only apply to fossil fuel generators that were in operation before July 2019 and emissions limits should not be breached for more than one year.
Anna Moskwa, Poland’s climate minister, said that “it is about understanding each other’s needs. If one of us is secure, we are all secure . . . For some of us, security means capacity market.”
The European Commission proposed to overhaul the EU’s electricity market to pave the way for more renewable power in the bloc and reduce the risk of another rise in prices after the one experienced as a result of Russia’s full-scale invasion of Ukraine last year.
The regulation centres around the use of state-backed contracts that ensure that electricity producers only charge a set price and return additional profits.
Many countries including Belgium, Germany and Denmark raised concerns that if they are used for existing as well as new energy plants, as France has been pushing for, this could lead to distortions in the EU’s internal market and unfairly benefit certain companies.
“Electricity market design cannot be a rubber-stamping without state aid oversight,” said Tinne Van der Straeten, Belgium’s energy minister.
Ministers were due to agree a common position on the reforms on Monday so that member states can negotiate the final shape of the regulation with the European parliament in the autumn. The changes should then start to take effect in 2024.
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