(Bloomberg) --
The chief executive officer of nuclear power giant Electricite de France SA said the European Union must overhaul its energy market to encourage long-term investments in order to achieve the goal of becoming carbon neutral in 2050.
“The short-term prices are the only price signals for long-term investment, so we believe that this has to change,” Jean-Bernard Levy said at a conference in Paris Monday.
While those short-term signals are needed for the day-to-day operations of utilities, they are “inconsistent” with the region's long-term decarbonization goals and for the protection that consumers and companies need, Levy said. Europe needs more long-term planning on infrastructure and a long-term carbon price indicator since its current European system of carbon permits is “very volatile.”
Levy's comments came as finance ministers of the 27-nation European Union meet in Luxembourg Monday and Tuesday to discuss ways to help consumers and companies cope with record prices of gas that have spilled over to the carbon and electricity markets.
The EU eventually may adopt a hybrid system -- with long-term infrastructure planning and short-term price fixing -- such as the ones being tried in Brazil, California and Ontario, Canada, Levy said.
He also urged EU nations to overcome their divisions concerning nuclear power when setting the financial rules for funding the continent's energy transition. Otherwise, only non-European banks -- either U.S. banks or state-controlled Russian and Chinese institutions -- will be able to finance new atomic plants in countries planning to use nuclear energy to achieve their net-zero emissions goals, Levy said.
EDF operates 56 reactors in France and others in the U.K. Its shares are down about 10% so far this year, compared with a 5.3% decline in Europe's STOXX 600 Utilities Index.
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