(Adds quotes and comments from energy companies, background)
By Bate Felix
PARIS Oct 11 France has reached a technical
agreement with European Union state aid regulators that could
end a full investigation into its power capacity mechanism, a
French official said on Tuesday.
A formal approval from European Union state aid regulators
could mean that the French plan, aimed at securing power and
avoiding blackouts during peak demand periods, could come into
effect from January, energy ministry official Julien Tognola
told a gas and electricity congress in Paris.
"The formal decision has not been taken by the Commission,
but as it is the case with these kinds of issues, we always try
to get a technical accord with EU competition authorities, which
we have," Tognola said.
European Union state aid regulators opened a full
investigation into the French plan over concerns that it could
favour big energy companies like EDF and Engie
and stifle new competition.
Tognola said France had held discussions with European Union
officials over the past months and had made modifications in its
capacity market plan.
"We are comfortable that with the modifications, the
Commission will be able to give us its accord in the coming
weeks," he said.
"That is why we have told stakeholders in the sector that,
given this scenario, the capacity mechanism will enter into
force from Jan. 1, 2017 as planned and we need to work towards
that date," Tognola added.
Capacity mechanisms are used to fund electricity generation
plants that may not be cost-effective but can guarantee supply
during peak demand.
"The mechanism will give actors in the sector a real
visibility on either maintaining capacity or investing in new
capacities so as to be available during a peak winter demand
period," Gilles le Mouillour, deputy head of regulatory affairs
at Engie, said at the conference.
Xavier Caitucoli, Chief Executive Officer of alternative
energy supplier Direct Energie said that although the
plan is a positive first step, there were concerns about some
aspects of the plan, notably the centralised tenders for new
power production capacities.
"We should not necessarily trust the market to decide on
security of power supply," he told reporters on the sidelines of
Caitucoli said the price signal of new production capacity
tenders would be too short-term and too volatile and could
prevent companies form investing in new capacities.
"We seem to be making the same mistake as in the carbon
permits market. We are trusting the market with a decision that
is political," he said.
(Reporting by Bate Felix; Editing by Geert De Clercq)