Saving the electron common market
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Il must believe, to paraphrase former President Jacques Chirac, that the black swans fly in squadrons. These volatiles are assumed to represent events with a very low probability but with major consequences. Each of them is devastating, but when they meet, the explosion is considerable. In the field of energy, three swans are hovering above our heads: the explosion in gas prices due to the drop in Russian deliveries, the exceptional heat wave and the drought that hit the entire northern hemisphere, reducing the capacity of hydroelectric dams, and finally, for France, the shutdown of more than half of nuclear reactors for technical problems.
Three unrelated events that contribute to a reduction in the supply of electricity at a time when this very sophisticated form of energy is essential in all uses of society, including in transport and industry. Yet our switches still work. No general cuts or shortages like many countries around the world experience daily. Europe has succeeded in ensuring its energy security by interconnecting its electricity networks, which enables each country to remedy its shortcomings or sell its surplus almost instantaneously.
A size constraint
The Old Continent had three priorities in mind when it set up its common electron market. First of all, energy security, of course, but also the economic liberalization of this activity, formerly led by national monopolies. Then came the need to promote renewable energies. With a size constraint, unlike gas and oil, electricity, once produced, is very difficult to store in the long term (except by raising water from dams). It is therefore necessary to constantly produce for demand, whereas wind turbines or solar power produce at zero cost but are intermittent. All of this being marketed in an open, fluid and very responsive market. Hence the need to imagine a system that makes it possible to make profitable power plants that will only operate during peak energy demand, for example in winter. Hence the current formula which fixes the instantaneous tariffs of all on that of the last power plant called, generally gas, because they are the most expensive. The multiplication by ten of the price of gas shatters this beautiful mechanism.
Reform is now inevitable. But it will have to both challenge the purely liberal logic of a market that is too strategic to be governed by the laws of the market alone and preserve the pooling of European forces which has proven its effectiveness. A new test of the strength of the European ship in the storm.
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