Rule drafted for carbon trapping

France Electricity Pricing Mechanism aligns with EU rules, leveraging nuclear energy and EDF profits, avoiding Contracts for Difference, redistributing windfalls to industry and households, targeting €70/MWh amid electricity market reform and Brussels oversight.

Key Points

A framework to keep power near €70/MWh by reclaiming EDF windfalls and redistributing them under EU market rules.

✅ Targets average price near €70/MWh from 2026

✅ Skims EDF profits above €78-80 and €110/MWh thresholds

✅ Aligns with EU rules; avoids nuclear CfDs and state aid clashes

France has unveiled a new electricity pricing mechanism, hoping to defuse months of tension over energy subsidies with Brussels and its neighbors.

The strain has included a Franco-German fight over EU electricity reform with Germany accusing France of wanting to subsidize its industry via artificially low energy prices, while Paris maintained it should have the right to make the most of its relatively cheap nuclear energy. That fight has now been settled.

On Tuesday, the French government presented a new mechanism — complex, and still-to-be-detailed — to bring the average price of electricity closer to €70 per megawatt hour (MWh) as of 2026, amid Europe's electricity market revamp efforts.

"The agreement has been defined to comply with European rules and avoid difficulties with the European Commission," said France's Economy and Finance Minister Bruno Le Maire, noting that France had ruled out other "simpler" options that would have caused tension with Brussels.

For example, France has not yet envisaged the use of state-backed investment schemes called Contracts for Difference (CfD), which were the main source of discord in talks with Germany on the electricity market reform and the EU push for more fixed-price contracts in generation. The compromise agreed by EU ministers last month gives the Commission the power to monitor CfDs in the nuclear sector.

"France wanted to limit as much as possible the European Commission's nuisance power," said Phuc-Vinh Nguyen, an energy expert at the Jacques Delors Institute think tank in Paris.

The announcement came weeks after French President Emmanuel Macron promised that France would "take back control" of its electricity prices to allow its industry to make the most of the country's relatively cheap nuclear energy.

Germany, by contrast, has moved to support energy-intensive industries with an industrial electricity subsidy, underscoring the policy divergence.

“The price of electricity has always been a major competitive advantage for the French nation, and it must remain so,” Le Maire said.

Under the new mechanism, part of a broader deal on electricity prices between the state and EDF, the government will seize EDF profits above certain thresholds and redistribute them directly to industry and households to bring prices closer to the desired level. Specifically, the government will redistribute 50 percent of EDF’s additional profits if prices rise above €78-€80 per MWh, and 90 percent of extra profits if prices rise above €110 per MWh.

The move also marks a new step in the government's power grab at EDF, after the company was fully nationalized earlier this year.

For years, France has been discussing an EDF reform with the Commission in order to address concerns by Brussels regarding disguised state aid to the company. In particular, the Commission wanted assurances that any state aid given to nuclear would be kept separate from those parts of the business subject to competition, such as renewable energy development.

An economy ministry official close to Le Maire argued that the new pricing mechanism would settle matters with Brussels on that front. A Commission spokesperson said Brussels was in contact with France on the file, but declined further comment.

The mechanism will replace the existing EU-mandated energy pricing mechanism, dubbed ARENH, which was set to expire at the end of 2025, and which has forced EDF to sell some of its electricity to competitors at a fixed low price since 2010, and comes amid contested electricity market reforms at EU level.

The new system could benefit EDF because it won't be bound to sell energy at a lower price, but instead will be allowed to auction off its energy to competitors. On the other hand, the redistribution system would deprive the company of some profits when electricity prices are higher. No wonder, then, that negotiations between the government and EDF have been "difficult," as Le Maire put it.

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China Renewable Energy Law drives growth in wind power, solar thermal, and photovoltaic capacity, supporting grid integration and five-year plans, even as China leads CO2 emissions, with policy incentives, compliance inspections, and national resource assessments.

Key Points

A legal framework that speeds wind, solar thermal, and PV growth in China via mandates, incentives, and grid rules.

✅ 2018 renewables: 1.87T kWh, 26.7% of national power

✅ Over 100 State Council policies enabling deployment

✅ Law inspections and regional oversight across six provinces

China leads renewable energies, installing more wind power, solar thermal and photovoltaic than any other country, as seen in the China solar PV growth reported in 2016, but also leads CO2 emissions, and much remains to be done.

The effective application of Chinas renewable energy law has boosted the use of renewable energy in the country and facilitated the rapid development of the sector, as solar parity across Chinese cities indicates, a report said.

The report on compliance with renewable energy law was presented today at the current bimonthly session of the Standing Committee of the National Peoples Assembly (APN).

Electricity generated by renewable energy amounted to about 1.87 trillion kilowatts per hour in 2018, representing 26.7 percent of Chinas total energy production in the year, aligning with trends where wind and solar doubling globally over five years, the report said.

Ding Zhongli, vice president of the NPC Standing Committee, presented the report to the legislators at the second plenary meeting of the session.

An inspection of the law enforcement was carried out from August to November, as U.S. renewables hit 28% record showed momentum elsewhere. A total of 21 members of the NPC Standing Committee and the NPC Environmental Protection and Resource Conservation Committee, as well as national legislators, traveled to six regions at the provincial level on inspection visits. Twelve legislative bodies at the provincial level inspected the law enforcement efforts in their jurisdictions.

The relevant State Council agencies have implemented more than 100 regulations and policies to foster a good policy environment for the development of renewable energy, as seen in markets where U.S. renewable electricity surpassed coal in 2022. Local regulations have also been formulated based on local conditions, according to the report.

In accordance with the law, a thorough investigation of the national conditions of renewable energy resources was undertaken.

In 2008 and 2014 atlas of solar energy resources and wind energy evaluation of China were issued. The relevant agencies of the State Council have also implemented five-year plans for the development of renewable energy, which have provided guidance to the sector, while countries like Ireland's one-third green power target remain in focus within four years.

The main provisions of the law have been met, the law has been effectively applied and the purpose of the legislation has been met, and this momentum is echoed abroad, with U.S. renewables near one-fourth according to projections, Ding said.

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UK Nuclear Free Electricity Incentive proposes community benefits near reactors, echoing France, supporting net zero goals, energy security, and streamlined planning, while addressing regulation and judicial review challenges for Sizewell C and future nuclear projects.

Key Points

A proposed policy to give free power to residents near reactors, supporting net zero and energy security.

✅ Free power for communities near nuclear plants

✅ Aligns with net zero and energy security goals

✅ Seeks streamlined planning and fewer approvals

UK Business Secretary Jacob Rees-Mogg has endorsed a French-style nuclear system that sees people living near nuclear power stations receive free electricity.

Speaking at an event organised by Policy Exchange think tank, Jacob Rees-Mogg said: “Nuclear power is just fundamental. There’s no way we can get to net zero emissions, or even have an intelligent electricity strategy and grid reform in the UK, without nuclear.”

Highlighting that this was his view and not a government policy announcement, he said: “We should copy the French. As I understand, if you live near a nuclear power station in France, you get free electricity and that’s great because then, I’ll have two in my garden if I get free electricity for my children as well.

“I think you want to recognise that things you do that are in the national interest, such as a state-owned generation company, must benefit those who make the sacrifice for the national interest.”

Earlier Mr Rees-Mogg stressed that he would like to see a simpler development consent process for new nuclear power plants to enable the next waves of reactors in the UK, amid concerns that Europe is losing nuclear power just when it really needs energy.

He said: “That’s a lot of regulation around that, as seen when nuclear plant plans collapsed in Wales and impacted the local economy. Did you know that Sizewell C will require 140 individual approvals from arms of the state, each one of which is potentially subject to judicial review.”

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California Rooftop Solar Rate Reforms propose shifting net metering to fixed access fees, peak-demand charges, and time-of-use pricing, aligning grid costs, distributed generation incentives, and retail rates for efficient, least-cost electricity and fair cost recovery.

Key Points

Policies replacing net metering with fixed fees, demand charges, and time-of-use rates to align costs and incentives.

✅ Large fixed access charge funds grid infrastructure

✅ Peak-demand pricing reflects capacity costs at system peak

✅ Time-varying rates align marginal costs and emissions

The California Public Service Commission has proposed revamping electricity rates for residential customers who produce electricity through their rooftop solar panels. In a recent New York Times op‐​ed, former Governor Arnold Schwarzenegger argued the changes pose an existential threat to residential rooftop solar. Interest groups favoring rooftop solar portray the current pricing system, often called net metering, in populist terms: “Net metering is the one opportunity for the little guy to get relief, and they want to put the kibosh on it.” And conventional news coverage suggests that because rooftop solar is an obvious good development and nefarious interests, incumbent utilities and their unionized employees, support the reform, well‐​meaning people should oppose it. A more thoughtful analysis would inquire about the characteristics and prices of a system that supplies electricity at least cost.

Currently, under net metering customers are billed for their net electricity use plus a minimum fixed charge each month. When their consumption exceeds their home production, they are billed for their net use from the electricity distribution system (the grid) at retail rates. When their production exceeds their consumption and the excess is supplied to the grid, residential consumers also are reimbursed at retail rates. During a billing period, if a consumer’s production equaled their consumption their electric bill would only be the monthly fixed charge.

Net metering would be fine if all the fixed costs of the electric distribution and transmission systems were included in the fixed monthly charge, but they are not. Between 66 and 77 percent of the expenses of California private utilities do not change when a customer increases or decreases consumption, but those expenses are recovered largely through charges per kWh of use rather than a large monthly fixed charge. Said differently, for every kWh that a PG&E solar household exported into the grid in 2019, it saved more than 26 cents, on average, while the utility’s costs only declined by about 8 cents or less including an estimate of the pollution costs of the system’s fossil fuel generators. The 18‐​cent difference pays for costs that don’t change with variation in a household’s consumptions, like much of the transmission and distribution system, energy efficiency programs, subsidies for low‐​income customers, and other fixed costs. Rooftop solar is so popular in California because its installation under a net metering system avoids the 18 cents, creating a solar cost shift onto non-solar customers. Rooftop solar is not the answer to all our environmental needs. It is simply a form of arbitrage around paying for the grid’s fixed costs.

What should electricity tariffs look like? This article in Regulation argues that efficient charges for electricity would consist of three components: a large fixed charge for the distribution and transmission lines, meter reading, vegetation trimming, etc.; a peak‐​demand charge related to your demand when the system’s peak demand occurs to pay for fixed capacity costs associated with peak use; and a charge for electricity use that reflects the time‐ and location‐​varying cost of additional electricity supply.

Actual utility tariffs do not reflect this ideal because of political concerns about the effects of large fixed monthly charges on low‐​income customers and the optics of explaining to customers that they must pay 50 or 60 dollars a month for access even if their use is zero. Instead, the current pricing system “taxes” electricity use to pay for fixed costs. And solar net metering is simply a way to avoid the tax. The proposed California rate reforms would explicitly impose a fixed monthly charge on rooftop solar systems that are also connected to the grid, a change that could bring major changes to your electric bill statewide, and would thus end the fixed‐​cost avoidance. Any distributional concerns that arise because of the effect of much larger fixed charges on lower‐​income customers could be managed through explicit tax deductions that are proportional to income.

The current rooftop solar subsidies in California also should end because they have perverse incentive effects on fossil fuel generators, even as the state exports its energy policies to neighbors. Solar output has increased so much in California that when it ends with every sunset, natural gas generated electricity has to increase very rapidly. But the natural gas generators whose output can be increased rapidly have more pollution and higher marginal costs than those natural gas plants (so called combined cycle plants) whose output is steadier. The rapid increase in California solar capacity has had the perverse effect of changing the composition of natural gas generators toward more costly and polluting units.

The reforms would not end the role of solar power. They would just shift production from high‐​cost rooftop to lower‐​cost centralized solar production, a transition cited in analyses of why electricity prices are soaring in California, whose average costs are comparable with electricity production in natural gas generators. And they would end the excessive subsidies to solar that have negatively altered the composition of natural gas generators.

Getting prices right does not generate citizen interest as much as the misguided notion that rooftop solar will save the world, and recent efforts to overturn income-based utility charges show how politicized the debate remains. But getting prices right would allow the decentralized choices of consumers and investors to achieve their goals at least cost.

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Iraq Nuclear Power Plan targets eight reactors and 11 GW to ease blackouts, curb emissions, and support desalination, with financing via partners like Rosatom and Kepco amid OPEC-linked demand growth and chronic grid shortages.

Key Points

A $40B push to build eight reactors adding 11 GW, easing blackouts, cutting emissions, and supporting desalination.

✅ $40B, 20-year payback via partner financing

✅ Talks with Rosatom, Kepco; U.S. and France consulted

✅ Parallel solar buildout to meet 2030 demand

Iraq is working on a plan to build nuclear reactors as the electricity-starved petrostate seeks to end the widespread blackouts that have sparked social unrest.

OPEC’s No. 2 oil producer – already suffering from power shortages and insufficient investment in aging plants – needs to meet an expected 50% jump in demand by the end of the decade. Building atomic plants could help to close the supply gap, though the country will face significant financial and geopolitical challenges in bringing its plan to fruition.

Iraq seeks to build eight reactors capable of producing about 11 gigawatts, said Kamal Hussain Latif, chairman of the Iraqi Radioactive Sources Regulatory Authority. It would seek funding from prospective partners for the $40 billion plan and pay back the costs over 20 years, he said, adding that the authority had discussed cooperation with Russian and South Korean officials, as Iran-Iraq energy cooperation progresses across the sector.

Plunging crude prices last year deprived Iraq of funds to maintain and expand its long-neglected electricity system, though grid rehabilitation deals have been finalized to support upgrades. The resulting outages triggered protests that threatened to topple the government.

“We have several forecasts that show that without nuclear power by 2030, we will be in big trouble,” Latif said in an interview at his office in Baghdad. Not only is there the power shortage and surge in demand to deal with, but Iraq is also trying to cut emissions and produce more water via desalination — “issues that raise the alarm for me.”

Raising financing will be a major task given that Iraq has suffered budgetary crises amid volatile oil prices. Even with crude at about $70 a barrel now, the country is only just balancing its budget, according to data from the International Monetary Fund.

The government will also have to tackle geopolitical concerns around the safety of atomic energy, which have stymied nuclear ambitions elsewhere in the region, even as Europe's nuclear decline underscores broader energy challenges.

Nuclear power, which doesn’t produce carbon dioxide, would help Gulf states’ efforts to cut emissions as governments worldwide, including India's nuclear push to expand capacity, look to become greener. The technology would also allow them to earmark more of their valuable hydrocarbons for export. Saudi Arabia, which is building a test reactor, burns as much as 1 million barrels of crude a day in power plants during its summer months when temperatures soar beyond 50 degrees Celsius (122 Fahrenheit).

The Iraqi cabinet is reviewing an agreement with Russia’s Rosatom Corp. to cooperate in building reactors, Latif said. South Korean officials this year said they wanted to help build the plants and offered the Iraqis a tour of UAE nuclear reactors run by Korea Electric Power Corp. Latif said the nuclear authority has also spoken with French and U.S. officials about the plan.

Kepco, Rosatom
Kepco, as the Korean energy producer is known, is not aware of Iraq’s nuclear plans and hasn’t been in touch with Iraqi officials or been asked to work on any projects there, a company spokesman said Tuesday. Rosatom didn’t immediately comment when asked about an agreement with Iraq.

Even if Iraq builds the planned number of power stations, that still won’t be sufficient to cover future consumption. The country already faces a 10-gigawatt gap between capacity and demand and expects to need an additional 14 gigawatts this decade, Latif said.

With this in mind, Iraq plans to build enough solar plants to generate a similar amount of power to the nuclear program by the end of the decade.
Iraq currently boasts 18.4 gigawatts of electricity, including 1.2 gigawatts imported from Iran into the grid. Capacity additions mean generation will rise to as much as 22 gigawatts by August, but that’s well short of notional demand that stands at almost 28 gigawatts under normal conditions. Peak usage during the hot summer months of July and August exceeds 30 gigawatts, according to the Electricity Ministry. Demand will hit 42 gigawatts by 2030, Latif said.

The nuclear authority has picked 20 potential sites for the reactors and Latif suggested that the first contracts could be signed in the next year.

It won’t be Iraq’s first attempt to go nuclear. Four decades ago, an Israeli air strike destroyed a reactor under construction south of Baghdad. The Israelis alleged the facility, called Osirak, was aimed at producing nuclear weapons for use against them. Iraq suffered more than a decade of violence and upheaval after the 2003 U.S. invasion, which was also motivated by allegations that Iraq wanted to develop weapons.

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Electrification Potential Study for Canada evaluates NRCan's decarbonization roadmap, assessing electrification of end uses and replacements for fossil fuels across transportation, buildings, and industry, including propane, diesel, natural gas, and coal, to guide energy policy.

Key Points

An NRCan study assessing electrification to replace fossil fuels across sectors and guide deep decarbonization R&D.

✅ Evaluates non-electric alternatives alongside electrification paths

✅ Covers propane, diesel, natural gas, and coal end uses

✅ Guides NRCan R&D priorities for deep decarbonization

The federal government wants to spend up to $300,000 on a study aimed at understanding whether existing electrical technologies can “reduce or eliminate” fossil fuels used for virtually every purpose other than generating electricity.

The proposal has caused consternation within the Saskatchewan government, whose premier has criticized a 2035 net-zero grid target as shifting the goalposts, and which has spent months attacking federal policies it believes will harm the Western Canadian energy sector without meaningfully addressing climate change.

Procurement documents indicate the “Electrification Potential Study for Canada” will provide “strategic guidance on the need to pursue both electric and non-electric energy research and development to enable deep decarbonisation scenarios.”

“It is critical that (Natural Resources Canada) as a whole have a cross-sectoral, consistent, and comprehensive understanding of the viability of electric technologies as a replacement for fossil fuels,” the documents state.

The study proponent will be asked to examine possible replacements for a range of fuels, including propane, transportation fuel, fuel oil, diesel, natural gas and coal, even as Alberta maps a path to clean electricity for its grid. Only international travel fuel and electricity generation are outside the scope of the study.

“To be clear, the consultant should not answer these questions directly, but should conduct the analysis with them in mind. The goal … is to collate data which can be used by (Natural Resources Canada) to conduct analysis related to these questions,” the documents state.

Natural Resources Canada issued the request for proposals one week before Prime Minister Justin Trudeau officially launched a 40-day election campaign in which climate and energy policy, including debates over Alberta's power market like a Calgary retailer's challenge, is expected to play a defining role.

It also comes as the federal government works to complete the controversial Trans Mountain Pipeline Expansion project through British Columbia, amid tariff threats boosting support for Canadian energy projects, which it bought last year for $4.5 billion and is currently bogged down in the court system.

A Natural Resources Canada spokeswoman said the ministry would not be able to respond to questions until sometime on Thursday.

While the documents make clear that the study aims to answer unresolved questions about what the International Energy Agency calls an increasingly-electric future, with clean grid and storage trends emerging, without a specific timeline, the provincial government is far from thrilled.

Energy and Resources Minister Bronwyn Eyre said the document reflects the federal government’s “hostility” to the energy sector, even as Alberta's electricity sector faces profound change, because government ministries like Natural Resources Canada don’t do anything without political direction.

Asked whether a responsible government should consider every option before taking a decision, Eyre said a government that was not interested in eliminating fossil fuels entirely would not have used such “strong” language in a public document, noting that provinces like Ontario are grappling with hydro system problems as well.

“I think it’s a real wake-up call to what (Ottawa’s) endgame really is here,” she said, adding that the document does not ask the proponent to conduct an economic impact analysis or consider potential job losses in the energy sector.

The study is organized by Natural Resources Canada’s office of energy research and development, which is tasked with accelerating energy technology “in order to produce and use energy in … more clean and efficient ways,” the documents state.

Bidding on the proposal closes Oct. 14, one week before the federal election. The successful proponent must deliver a final report in April 2020, according to the documents.

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