The Brussels plan addresses the tension between a single large nation and major energy employers, while other member states push for deeper, structural reforms to Europe’s energy market rules. The core divide is clear: some countries want only modest tweaks that keep the current framework intact, while others seek fundamental changes that would reshape the system for the long term. The European Commission has proposed a regulatory path it believes can gain broad assent from the twenty-seven members and secure approval from the European Parliament. The main goal is to finalize reform before the next European elections in May 2024, so progress does not stall in a new term.
The Commission’s intent is straightforward: speed up negotiations and deliver a completed reform within the year, enabling measures to be in place before the winter if energy prices rise again. Commission insiders emphasize a strong desire to implement reforms quickly and have them in effect before the end of 2024, ensuring timing aligns with anticipated price pressures. They describe these timelines as workable for the administration.
Spain’s government advocates for a rapid agreement to accelerate reform, while the European Council seeks substantial changes within Spain’s presidency term and aims for an agreement as soon as possible this year. Traditionally, overhauling a framework of this magnitude in the EU could take roughly two years, but the objective here is to compress the timeline wherever feasible.
A measured reform path
The Brussels proposal avoids radical shifts and instead preserves the basic architecture of the current market. In this system, the latest generation technologies set the price for others and long-term contracts help stabilize supply and cost. The plan would emphasize enabling longer-term agreements without dismantling the market structure entirely. It seeks to reduce volatility by promoting long-term supply arrangements at stable prices, delivering reliability alongside market dynamics for predictable pricing that benefits both producers and consumers.
The Commission envisions long-term contracts as a tool for price stability without proposing sweeping regulatory rewrites. It encourages bilateral power purchase agreements between producers and large consumers, supported by public guarantees or by allotting a portion of new authorization tenders to such contracts to lower financial risk for signatories. This reflects a practical, market-driven approach similar to strategies seen in North American energy markets during times of volatility, offering a path to price certainty through private arrangements.
On the other side, the proposal supports contracts for difference through auctions that cap price risk by bridging gaps between market prices and agreed prices. These arrangements would apply to new renewable and nuclear plants as well as existing facilities, including measures to extend the life of nuclear assets if needed. Spain’s position includes extending such contracts to all installations and applying a regulated price to those already in operation, including nuclear and hydro facilities.
The Commission’s stance favors a measured reform that preserves current market mechanisms, except in conditions of exceptional crisis, while avoiding regulatory overreach that could increase uncertainty and deter investment. Senior officials warn that drastic, crisis-driven changes can backfire, creating instability that undermines long-term energy security and investment confidence.