Italy withdraws objections to EU power market reform

Italy withdraws objections to EU power market reform

Italy’s Undersecretary for Economic Development, Davide Crippa.

Italy’s Undersecretary for Economic Development Davide Crippa announced on Thursday that the country has decided to 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 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, as well as evaluate whether flexible capacity mechanisms or a strategic reserve on the German model are more convenient.

The alliance, which now includes Poland, France, Hungary, Greece, Ireland and the UK, had expressed serious “strategic reserves" about the proposed reform of the European electricity market. According to the group EU countries “have a fundamental responsibility to maintain security of supply,” adding that “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.

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 noted in his 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.

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