Nine EU states, including Germany, rejected an offer led by France to reform the European energy wholesale markets on Monday in view of rising prices.
“Since the price spikes have global drivers, we should be very careful before intervening in shaping the internal energy markets,” the Nine said in a joint statement.
France wants electricity prices to be decoupled from gas prices as it is unfair to consumers to pay the difference between what they have to pay compared to the “extremely low cost” of nuclear energy.
“This will not be a cure to mitigate the current rising energy prices associated with the fossil fuel markets,” said the day before an emergency meeting from Austria, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Luxembourg and the Netherlands EU energy minister.
Earlier this month, France and Spain finance ministers called for reform of the bloc’s wholesale electricity market, including tariff regulation, as prices continue to skyrocket.
The French Finance Minister Bruno Le Maire had previously complained that the EU gas price system had a disproportionate influence on the setting of wholesale electricity prices and had driven them up in recent months with the approach of winter.
Le Maire appealed to the bloc to review the functioning of the internal electricity market from top to bottom, as its current rules were deemed “obsolete”.
But without singling out Paris, the Nine said they “cannot support any measure that conflicts with the internal gas and electricity market, such as an ad hoc reform of the wholesale energy market”.
The nine stated that competition between different fuel sources “contributes to innovation and security of supply and is therefore a key element in the transition” to low carbon emissions.
The European electricity market âhas been functioning well for 20 years with really competitive pricesâ¦ Meddling could be extremely dangerous. That could destroy any confidence in this market, âsaid Luxembourg’s energy minister Claude Turmes at the beginning of the month.
The gas prices are currently helping to fix a price in the entire block-wide electricity market. In countries that mainly consume expensive fossil fuels, the average price is increased to meet the increasing demand.
The European Commission says it is happy with its so-called marginal wholesale pricing system, which gives bloc members the same price for the electricity they produce while encouraging the development of renewable energy sources.
The commission said earlier this month it wanted to investigate potential anti-competitive behavior and market manipulation without questioning the status quo.
It made the announcement after gas prices hit record highs, noting that wholesale electricity prices rose more than 200 percent between January and September, which also pushed retail prices higher.