Europe’s energy market reform backed by parliamentarians
The EU Parliamentary Committee on Industry, Research and Energy (ITRE) has proposed consumer protection and flexibility amendments to the draft market reform legislation.
Among the consumer-related amendments proposed with the current price volatility in mind, consumers should have the right to fixed price contracts and dynamic price contracts, as well as more key information on the options they sign up to and a banning of suppliers from being able to unilaterally change the terms of a contract.
It also was advocated that EU countries should prohibit suppliers from cutting the electricity supply of vulnerable customers, including during disputes between suppliers and customers, and prevent them from requiring these customers to use prepayment systems.
The Committee also backed wider use of ‘Contracts for Difference’ (CfDs) to encourage energy investments and suggested leaving the door open for equivalent support schemes after approval by the Commission.
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The importance of power purchase agreements (PPAs) was also highlighted in providing consumers with stable prices and renewable energy providers with reliable revenues.
The European Commission is tasked with setting up a marketplace for PPAs by the end of 2024.
Commenting on these outcomes, rapporteur Spanish MEP Nicolás González Casares said that with the agreement, “the parliament is putting citizens at the centre of the design of the electricity market, promoting the right to share energy, reducing price spikes and promoting affordable prices for citizens and companies”.
“We turned CfDs into the reference system for encouraging the electricity sector to transition towards a renewable-based zero emission system. A system that will improve make companies more competitive through clean electricity at competitive and stable prices.”
System flexibility
The other key focus of the Committee was system flexibility, with it advocating in favour of ‘non-fossil flexibility’ and flexibility on the demand side, for instance via the use of home battery systems to help balance the grid and to empower consumers to adapt their consumption to prices and needs.
These provisions have been welcomed by the European Association for Storage of Energy (EASE), which said in a statement they would give investors confidence in energy storage technologies to provide the flexibility needed to integrate further renewable energy.
Member states would now have the powers to set up non-fossil flexibility support schemes, which provide energy storage a solid business case.
Additionally, EU countries must now assess the flexibility needed in the electricity system to deploy further sources of renewable energy in line 2030 climate goals, and set a national objective for energy storage.
The Commission is expected to introduce a strategy for energy storage from 2025, to ensure a harmonised approach across the EU.
The reform package will now go to the Commission and Council.
