EU´s electricity market reform: deal ensures better consumer protection and more affordable green energy in Europe

Renew Europe welcomes today´s interinstitutional agreement on the revised Electricity Market Design (EMD), which enables a framework to tackle the shortcomings of the EU energy market in response to energy price volatility after the economic rebound of the Covid-19 pandemic and Russia´s weaponisation of gas supplies following their invasion of Ukraine. The agreed reform aims to provide more stability in electricity prices for consumers, enhance the uptake of renewables in the ongoing transition towards more sustainable energy sources and make the EU's industry clean and more competitive.

Renew Europe MEP Morten Helveg Petersen (Det Radikale Venstre, Denmark), Vice-Chair of the Committee on Industry, Research and Energy (ITRE) and Renew Europe shadow on this file, stated:

“With this agreement, we pave the road for a faster green transition by keeping the market at the centre of the reform, ensuring greater protection for European consumers without sacrificing the principles of competition. This deal also gives stability and predictability, so we can deploy renewables into our energy system at a much larger pace, as well as a much-needed framework for cheaper and greener energy to all Europeans. We also managed to secure flexibility in the way Member States can design their roadmap to support the deployment of cleaner energies. After all efforts made, the deal represents a real boost for energy security, price stability and decarbonisation”

Background

Renew Europe negotiating team has strongly advocated to maintain a market-based approach, without undermining the principles of flexibility and competition, to achieve a truly European future-proof electricity system integration, based on diverse infrastructure projects that produce, store, and distribute energy efficiently. Moreover, our political group upheld the right to a wider choice of fixed-rate contracts to bring stability and predictability to consumers energy bills, while measures to curb short-term price peaks through power purchase agreements for industries and businesses, specially SMEs.

As for the renewable energy auction scheme, the Commission shall analyse the possibility to use the Union renewable energy financing mechanism to organise EU-level renewable energy auctions in line with the relevant regulatory framework. Additionally, the agreement sets out the specific conditions for the Council (based on a Commission proposal) to declare an electricity price crisis at regional or Union level, which would allow Member States to increase market intervention on an exceptional basis. Overall, renewables, energy efficiency, energy sharing and energy infrastructures will play a key role in enabling progress towards European energy sovereignty and the net-zero economy.

Next steps

The provisional agreement now needs to be approved by both Parliament and Council to become law. The Industry, Research and Energy committee will vote on the file during a forthcoming meeting.