Spain's EU power market reform draft includes subsidies for existing plants
VALLADOLID, Spain, July 12 (Reuters) - Spain has proposed state aid for existing power plants, but with limits to avoid market distortions, in a bid to end a stalemate over reform of the European Union's electricity market, according to a draft seen by Reuters on Wednesday.
EU countries have so far failed to reach an agreement over a draft plan on how to change the market to boost renewable energy and protect consumers from price spikes.
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Member countries have clashed over how far they can go to subsidise existing plants using new, fixed-price power contracts with the state.
This remain a key sticking point, a person familiar with the negotiations told Reuters on Wednesday, with some countries warning that this could distort the EU market by giving some states a competitive advantage. The potential use of these subsidies for French nuclear plants is a key focus of such concerns, this person said. The Spanish document includes subsidies for existing plants, providing that the investments meet some conditions, such as extending a plant lifetime by at least 10 years or a substantial increase in its capacity.
However it sets some limits, in particular related to plant lifespan extensions, such as limiting the share of electricity under the contract, compared with the overall electricity produced by the plant.
Spain's proposal may lead to an agreement but more changes are necessary, Sven Giegold, state secretary at Germany's Economy Ministry, told reporters on Wednesday.
"I'm optimistic the Spanish presidency (of the EU Council) has made a good proposal," he said, adding that he was optimistic that "finally this can lead the way towards a majority".
(Reporting by Pietro Lombardi; editing by David Latona, Jason Neely and Aislinn Laing)