French energy giant EDF has called for a radical shake up of the European Union energy market in order to increase generating capacity and to facilitate the transition to low-carbon energy.
The current EU energy market was set up to encourage competition between suppliers to keep consumer prices low. However, this structure gave little incentive for investment in the next generation of electricity generation.
In a statement yesterday, EDF chairman and CEO Jean-Bernard Lévy said:
“Operators today can barely cover their variable costs with this market model… Energy supply is secured, but no operator is able to invest in building new means of production without public subsidies to support them.
“It is now urgent to reform the current market and to adapt it to the energy transition, by quickly implementing capacity mechanisms in order to secure energy supply, by setting a European carbon price which will be in line with the commitments made by Europe at COP21, and by introducing a new and enhanced regulation.”
This is a particular problem in the UK, where underinvestment over decades has left us dependent upon an aging fleet of coal and nuclear power stations that will need to close within the next decade if we are to have any chance of meeting the COP21 climate targets.