Detailed proposals to change EU energy law are ready to undergo the legislative process. What should we expect?
The Commission’s consultation (which we looked at here) did not signal significant market redesign, but rather acceleration of the current direction of travel.
Stakeholder feedback was that short-term markets (day-ahead and intraday) and marginal pricing function well, provide the right price signals, are well-developed, and are the result of years of implementation of EU energy legislation.
Risk of high energy prices will instead be tackled by swifter delivery and integration of renewable energy, more efficient utilisation of the grid through increased use of flexibility services, and clearer and more regular communication around capacity for new grid connections.
There are also efforts to ensure that offshore projects have adequate access to interconnector capacity.
There is a strong focus on providing the long-term price signals needed to support renewable energy project development, particularly by use of corporate Power Purchase Agreements, support scheme contracts for difference, and enhanced forward markets.
There are also measures around the contractual and trading structures for customers, intended to protect against price volatility and enable them to reap rewards for providing demand response and flexibility services.
The proposals should be used as a tool by market participants to raise awareness about the current barriers they face and to strengthen the case for their solutions to progress project delivery and ensure optimal market functioning.
The Commission invites feedback until 23 May 2023.
For more detail on how the proposals would amend Clean Energy Package legislation, our briefing is available here.