The Brussels plan centers on observed tensions between one large nation and many major energy employers, while other member states push for deeper, structural reform to the rules governing Europe’s energy market. This approach reflects divergent priorities: some countries seek only modest adjustments, preserving the current operating framework, whereas others argue for fundamental changes that would reshape the system for the long term. The European Commission has put forward a regulatory proposal that it believes should move forward now, with the aim of securing broad agreement among the twenty-seven members and gaining approval from the European Parliament. The overarching objective is to complete reform ahead of the next European elections in May 2024, because a delay would push reform into a new term and stall progress for longer than desired.
The Commission’s intent is clear: accelerate negotiation efforts and deliver a finalized reform within the year, so the measures can be in place before winter if energy prices rise again. Sources within the Commission emphasize that the will is to implement reforms as swiftly as possible and to have them adopted before 2024 ends, ensuring they take effect before the next high-price period. They further note that these timelines are considered workable by the administration.
Spain’s government has argued for a rapid agreement to accelerate the reform process, while the European Council’s preference is to complete substantial changes within Spain’s presidency term and to push 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 aims to avoid sweeping, radical shifts and instead preserve the basic architecture of the current market, where the latest generation technology sets the price for others and long-term contracts help stabilize supply and cost. The plan would focus on enabling longer-term agreements without dismantling the existing market structure entirely. It emphasizes long-term supply arrangements at stable prices to reduce volatility in the system. This approach seeks a balance between reliability and market dynamics, ensuring predictable pricing for both producers and consumers.
The Commission envisions promoting long-term contracts as a tool for price stability, without proposing sweeping regulatory rewrites. On one hand, there is encouragement for bilateral power purchase agreements between producers and large consumers, supported by public guarantees or by allocating a portion of new authorization tenders to such contracts to lower financial risk for signatories. This aligns with a practical, market-driven approach that Canadian and American energy buyers sometimes consider in volatile markets, offering a path to price certainty through private arrangements.
On the other hand, 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, absent exceptional crisis conditions, while avoiding regulatory overreach that could increase uncertainty and deter investment. Senior officials caution that drastic, crisis-driven changes can backfire, creating instability that undermines long-term energy security and investment confidence.