Christopher Jones is a competition law specialist based in Baker & Mackenzie’s Brussels office, following three decades in senior roles within the European Commission’s energy arena. He supported the 20/20/20 agenda, even when some doubted its achievability. This week, he joined a debate hosted by the Circolo Ecuestre de Barcelona, sharing the stage with other experts as they voiced support for Brussels’s electricity reform while evaluating Spain’s interventionist approach.
What is the view on Brussels’s electricity market reform?
The assessment is broadly favorable. The proposal rests on three pillars. First, it retains the marginal price system that has governed the market for the past thirty years, which is seen as advantageous. Second, it shapes a market-driven framework that allows renewable and nuclear energy to develop through competition, with a market-based mechanism delivering support via contracts for difference. In short, the plan preserves market roles while modernizing its operation. As long as that balance remains, the reform is viewed positively; some member states may push to return to a regulated regime.
This contrasts with Spain, which leans toward intervention. The Spanish model has relied on government-set prices for renewable energy through subsidies. That approach has yielded high income levels, but it has also invited retroactive changes that undermine investor confidence. Investors favor rules that stand firm for the duration of a project, and the Commission has noted in recent directives that retrospective shifts can be illegal and that prices should be set by competitive market forces.
-Is the marginalist system still justified given differences in energy mixes across countries?
Spain is not unique in that regard. Every member state has its own energy profile. Denmark, for instance, runs more on renewables than Spain, while others like Poland or the Netherlands invest in nuclear energy. Yet, the reality is that all electricity purchases occur under a marginal price framework, just like other goods. A professor from the University of Florence, in collaboration with MIT, explored several pricing models; while none proved superior, the marginalist approach remains the least problematic option.
-What about the Iberian mechanism that caps gas prices for electricity? Should it stay?
Only Spain and Portugal requested that mechanism. There must be a reason why other European countries show little interest. The EU framework has worked well for others, and those nations do not need an additional tool. Gas prices are around 40 euros, modestly higher than two years prior, but electricity prices are expected to follow that trajectory. If gas stockpiles stay ample, the mechanism could distort incentives for investors and yield no positive outcome.
-Is Brussels right to treat gas and nuclear as green?
Not exactly. The gas taxonomy rules are stringent and may limit new investments in gas technology, while nuclear energy faces variable acceptance depending on national views about the technology. Overall, the taxonomy seeks a balanced approach that does not unfairly skew investment opportunities.
-As a supporter of the 20/20/20 agenda, how does the ecological transition look in Europe?
When those targets were first announced, many doubted them. Solar and wind were deemed expensive and unstable. Yet the costs have fallen dramatically, and renewables are now a global driving force because of EU leadership. Europeans can be proud of this progress, and the policy stance is essential to reaching the 2050 goals. With continued commitment, Europe can demonstrate what is possible on a continental scale.
-Following the Barcelona-Marseille hydro canal project, will there be more conversions from gas pipelines to hydro infrastructure?
Yes. Building a coordinated transport network is crucial for Europe. For example, Belgium might need to import hydrogen produced from renewable sources or, if feasible, from North Africa. A dedicated hydrogen transport network would likely repurpose existing pipelines to carry hydrogen, while remaining energy links would be modernized. If electricity can be used directly, it remains the most efficient option compared with hydrogen where feasible.
-What is the forecast for gas prices?
Gas prices continue to influence electricity costs. While precise numbers are uncertain, the expectation is cautious stability into the next winter. The focus remains on boosting investment in renewables to secure supply and stabilize prices, rather than chasing speculative shifts. The ongoing debate should pivot toward sustainable growth and resilience in energy supply for the future.