European Union Plans to Reform Electricity Markets to Boost Renewables

European Union

The European Commission just proposed a reform of the EU electricity market that will boost renewable energies, protect consumers and enhance industrial competitiveness of the Union. The reform aims to incentivize longer-term contracts with renewable energy producers and aims to increase open and fair competition in the European wholesale energy markets. The ultimate goal of the reform is to create a sustainable and independent energy supply to the EU, in line with the European Green Deal and the REPowerEU Plan.

To protect and empower consumers, the reform provides wider choice for contracts and clearer information to enable consumers to lock in secure, long-term energy prices. Furthermore, rules on sharing renewable energy are being revamped, so consumers will be able to invest in wind or solar parks and sell excess rooftop solar electricity to neighbors. The proposal also enables system operators to procure demand reduction at peak hours, boosting the flexibility of the power system.

The reform enhances energy cost predictability and stability to boost industrial competitiveness, aiming to provide power producers with revenue stability and shield the industry from price volatility. The proposal obliges Member States to ensure market-based guarantees for Power Purchase Agreements and facilitates the deployment of more stable long-term contracts. The reform also introduces new obligations to enhance predictability for generation and renewables integration into the system.

To ensure competitive markets and transparent price-setting, national regulators will have enhanced ability to monitor energy market integrity and transparency. The proposed reform is part of the Green Deal Industrial Plan, which outlines that a renewables-based energy system is not only crucial to lower consumer bills but also to ensure a sustainable and independent energy supply to the EU.

European Commission Press Release:Commission proposes reform of the EU electricity market

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