New “clean energy” package has been agreed by three EU’s legislative institutions: the Council, the European Parliament and the European Commission. New rules are aimed at making the EU’s electricity market work better with numerous energy union governance proposals including a number of directives: on energy efficiency, on renewable energy and on energy performance in construction.
European citizens spend a significant part of their income on energy, and energy is an important input for European industry. At the same time, the energy sector plays a key role in reducing greenhouse gas emissions in the EU by at least 40% until 2030 with an expected share of 50% of renewables by 2030.
“Clean Energy for All Europeans” package (adopted in Brussels on 18 December 2018) is a major step towards completing the Energy Union and combating climate change – the priorities of the present Commission.
Negotiators among three EU’s legislative institutions provided for a political agreement on the new electricity regulation and directive. This agreement follows previous agreements on the energy union governance proposal, the revised energy efficiency directive (see below), the revised renewable energy directive and a directive on energy performance in construction. Besides, a regulation on risk preparedness was adopted with a creation of a new Agency for the Cooperation of Energy Regulators (ACER).
On governance in energy union: http://europa.eu/rapid/press-release_IP-18-4229_en.htm;
On renewable energy in: http://europa.eu/rapid/press-release_STATEMENT-18-4155_en.htm;
On energy in construction in: https://ec.europa.eu/energy/en/topics/energy-efficiency/buildings;
Commissioner for climate action and energy Miguel Arias Cañete underlined that the “Clean Energy for All Europeans” package puts the EU among the global leaders in making adequate rules to accelerate and facilitate the clean energy transition. The new electricity market will be more flexible and facilitate the integration of a greater share of renewable energy. The new rules, he stressed, would create more competition and allow consumers to participate actively in the market with clean energy transition reconciling security of supply with the climate objectives.
The new electricity market proposals (with directives and a regulation) aim at adapting to the new market realities: they introduce a new limit for power plants eligible to receive subsidies as capacity mechanisms. Subsidies to generation capacity emitting 550gr CO2/kWh or more will be phased out under the new rules.
The new rules enable both the active participation of consumers and strong framework for consumer protection. By allowing electricity to move freely to where it is most needed, society will increasingly benefit from cross-border trade and competition. They will drive the investments necessary to provide security of supply, whilst decarbonising the EU’s energy system. The new market design also contributes to the EU’s goal of being the world leader in energy production from renewable energy sources by allowing more flexibility to accommodate an increasing share of renewable energy in the grid.
The shift to renewables and increased electrification is crucial to achieve carbon neutrality by 2050. The new electricity market design will also contribute to the creation of jobs and growth, and attract investments.
On 30 November 2016, the Commission proposed new rules (revised electricity market regulation and directive) on the EU energy market design in order to help energy markets include more renewables, empower consumers, and better manage energy flows across the EU.
More on the EU internal market for electricity (proposal for a regulation/directive, 23.ii.2017) in:
Markets need to be improved to meet the needs of renewable energies and attract investment in the resources, like energy storage, that can compensate for variable energy production. The market must also provide the right incentives for consumers to become more active and to contribute to keeping the electricity system stable. Today’s electricity market has fundamentally changed since 2009, when the most recent legislation was introduced. The share of electricity produced by renewables is expected to grow from 25% to 55% in 2030. But when the sun does not shine and the wind does not blow, electricity must still be produced in sufficient quantities to deliver energy to consumers.
The proposed measures also contain measures that ensure that state interventions designed to make sure there is sufficient energy available are only used when really needed, and in a way that does not distort the internal electricity market.
Through the revised directive, these new rules will put consumers at the heart of the transition: consumers will be able to become active players in the market thanks to access to smart meters, price comparison tools, dynamic price contracts and citizens’ energy communities. At the same time, energy poor and vulnerable consumers will enjoy better protection.
The revised electricity regulation brings stricter and harmonised rules for capacity mechanisms, reconciling thus the EU objectives of security of supply and emission reduction. Enhanced regional coordination will improve market functioning and thereby competitiveness while making the system more stable.
Following this political agreement, the texts of the Directive and Regulation will be prepared in all EU languages and then have to be formally approved by the European Parliament and the Council. Once endorsed by both co-legislators in the coming months, the new laws will be published in the Official Journal of the Union. The Regulation will enter into force immediately and the Directive will have to be transposed into national law within 18 months.
More on the issues discussed in the following web links:
– Energy Union ;
– Clean Energy for All Europeans package;
– Electricity markets.