This European Commission finalizes the proposal it wants to reform. European electricity market limiting the “excessive influence” of gas in determining the price of electricity, adapting its configuration to the new reality the EU is experiencing after the severe energy crisis caused by the war in Russia last year, and renewable energy. If there are no last-minute changes, the plan to be presented in the next step March 16begs to guarantee Fixed prices protect consumers In addition to high volatility long-term and more stable contracts to ensure its competitiveness european industry despite without abandoning the marginal pricing model because it “provides accurate price signals.”
“Reflection on short-term prices consumer bills caused price crisis Many consumers’ energy bills triple or quadruple even as wind and solar costs fall (…) The proposal therefore includes a series of measures aimed at creating a buffer between short-term markets and electricity bills paid by consumers“, pointing out draft Commission concluded. Brussels is particularly notable by promoting long-term contracts, better integrating renewable energies into short-term contracts, and educating and protecting consumers.
The proposal to improve the protection of these fixed prices, multiple contracts and clearer information. “Consumers should always have the opportunity to choose a contract. affordable, fixed price, fixed termand the providers should not unilaterally change the conditions before the contract in question expires”, the document states that “in this way, risk-averse consumers can set safe prices in the long term to avoid surprises and/or if they want to take advantage of price volatility to use electricity when it is cheapest, make dynamic price contracts with providers. ”
Adjusted prices in crisis
Brussels also offers domestic consumers and SMEs. regulated retail prices in case of crisis and stabilize the industry by asking suppliers to do more to guard against. price increasesmaking more use of future contracts with generators and one of the Member States last resort regimen provider. It also advocates giving. more power to consumers when creating the right to share renewable energy directly (self-consumption), without the need to create energy communities, for example “sharing more solar energy According to Brussels, it could provide greater access to direct use for consumers who could improve the use of low-cost renewable energy and would otherwise not have access to it.
with regard to measures to improve Competitiveness of the European industry and to protect it from price volatility, Brussels has a promote stable framework and long-term contracts. Currently, energy purchase contracts – long-term private contracts between a generator (renewable or low-carbon) and a consumer – are only available to large energy consumers. in very few Member States. According to the Commission, this is a obstacle Member States have to circumvent using financial instruments such as: government guarantees to ensure that they are insured against all kinds of risks. To further encourage this type of agreement, it also recommends: allow supporters reserve of renewable energy projects participating in a public tender (auction) part of the energy created for sale through purchase agreements.
Draft proposal still to be approved commission college and subject to change, it also considers so-called “contracts for difference”, where governments can guarantee a minimum and maximum fixed price to investors in low-carbon energy projects; The cap is returned. The second is just “New investments” in renewable energy (wind, solar, geothermal and hydraulic) and nuclearbut not as Spain recommends for older installations.
By improving the long-term contract markets, the European Commission hopes to achieve one of the reform goals: increase renewable energy investmentsa key piece for reduce the use of fossil fuels. “Electricity purchase agreements and differential agreements not only provide consumers with stable prices, but also reliable income to suppliers renewable energies. This lowers their financial risks and drastically reduces capital costs”, the Commission argues on the “virtuous cycle” will help reduce costs and increase demand of renewable energies The proposal also proposes the creation of demand management mechanisms — charging specific consumers so they can be used when needed. reducing consumption peaks at certain times of the day and requires Member States to assess their needs. power system flexibilityto create targets to satisfy them and offer new options flexibility support systems.