Politics

Parliament adopts reform of the EU electricity market | News

Published

10 months ago

April 15, 2024

The measures, composed of a regulation and a directive already agreed upon with the Council, were adopted with 433 in favour, 140 against and 15 abstentions, and 473 votes to 80, with 27 abstentions, respectively.

The law will protect consumers against volatile prices. MEPs ensured that they will have the right to access fixed-price contracts or dynamic price contracts, and receive important information on the options they sign up to. Suppliers will not be allowed to unilaterally change the terms of a contract.

MEPs also secured that EU countries can prohibit suppliers from cutting the electricity supply of vulnerable customers, including during disputes between suppliers and customers.

Contracts for Difference

The legislation provides for so-called “Contracts for Difference” (CfDs), or equivalent schemes with the same effects, to encourage energy investment. In a CfD, a public authority compensates the energy producer if market prices fall too steeply, but it collects payments from them if prices are too high. The use of CfDs will be allowed in all investments in new electricity production, whether from renewable or nuclear energy.

Electricity price crisis

The text sets out a mechanism to declare an electricity price crisis. In a situation of very high prices and under certain conditions, the EU may declare a regional or EU-wide electricity price crisis, allowing member states to take temporary measures to set electricity prices for SMEs and energy intensive industrial consumers.

Quote

“This reform puts citizens at the forefront of electricity market design. The text includes measures to protect citizens, especially the most vulnerable and to accelerate the deployment of renewable energy sources. The Parliament has taken a step forward in democratising energy, creating a market design that responds to the failures exposed by the energy crisis. All consumers, including micro, small, and medium-size enterprises will have access to long-term, affordable and stable prices.” lead MEP Nicolás González Casares (S&D, ES) said.

Next steps

After Parliament’s approval, Council also needs to formally adopt the legislation to become law.

Background

Energy prices have been rising since mid-2021, initially in the context of the post-COVID-19 economic recovery. However, energy prices rose steeply due to gas supply problems following Russia’s war against Ukraine in February 2022. High gas prices had an immediate effect on electricity prices, as they are linked together under the merit order system, where the most expensive (usually fossil fuel-based) energy source sets the overall electricity price.

Source link

Author

Jackie Manno

View all posts

Politics

Steering the EU towards greater sustainable competitiveness

Published

21 hours ago

January 29, 2025

Gaston de Persigny

DISCLAIMER: Information and opinions reproduced in the articles are the ones of those stating them and it is their own responsibility. Publication in The European Times does not automatically means endorsement of the view, but the right to express it.

DISCLAIMER TRANSLATIONS: All articles in this site are published in English. The translated versions are done through an automated process known as neural translations. If in doubt, always refer to the original article. Thank you for understanding.

A new framework to rekindle economic productivity and secure the EU’s competitive edge has been presented by the European Commission. The Competitiveness Compass builds on the recommendations set out in Mario Draghi’s report on the future of European competitiveness. It will steer the EU’s work on competitiveness over the next five years and translate the report’s recommendations into concrete actions for the EU’s future prosperity.

The EU enjoys a strong system of rights and values, a Single Market, top-notch infrastructure and a skilled workforce, but the Compass recognises that more must be done to ensure Europe keeps pace with other major economies in a challenging and increasingly competitive world. While all the time looking to secure the EU’s climate neutrality, it sets a path for Europe to become the place where future technologies and clean products are invented, manufactured, and put on the market.

The Compass identifies 3 core areas of action:

Innovation – The EU must close the innovation gap by creating an environment where innovative start-ups, effective industrial leadership and the diffusion of technologies across businesses thrive. Concrete initiatives from the Commission include ‘Apply AI’ and ‘AI Gigafactories’ to drive industrial adoption of AI; action plans for advanced materials, quantum, biotech, robotics and space technologies; and an EU Start-up and Scale-up Strategy that will address the obstacles that are preventing new companies from emerging and scaling up.
Decarbonisation and competitiveness – The EU will help bring down high and volatile energy prices through an Affordable Energy Action Plan. It will set out a competitiveness-driven approach to decarbonisation through its upcoming Clean Industrial Deal, while an Industrial Decarbonisation Accelerator Act will extend accelerated permitting to sectors in transition. It will also launch action plans for energy intensive sectors, such as steel, metals, and chemicals.
Security and resilience – The EU will reduce dependencies and increase its resilience and security by continuing to build effective trade partnerships with economies around the world. Through a new range of Clean Trade and Investment Partnerships it will help secure a supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world. It will also review public procurement rules to introduce a European preference in public procurement for critical sectors and technologies

Underpinning these actions will be five cross-cutting activities:

Simplification by drastically reducing the regulatory and administrative burden on firms
Lowering barriers to the Single Market through its Horizon Single Market Strategy
Financing competitiveness by establishing a European Savings and Investment Union
Promoting skills and quality jobs through a Union of Skills
Better coordination of policies at EU and national level by introducing a Competitiveness Coordination Tool

The Competitiveness Compass is the first major initiative of the Commission in the 2024-2029 mandate.

For more information

Strengthening European competitiveness

Draghi report

Communication – A Competitiveness Compass for the EU

A factsheet on the Competitiveness Compass

Press release: An EU Compass to regain competitiveness and secure sustainable prosperity

Source link

More from the author

– EXCLUSIVE CONTENT –

Author

Gaston de Persigny

View all posts

Politics

Avian influenza: EU agencies track virus mutations and analyse response strategies

Published

21 hours ago

January 29, 2025

Petar Gramatikov

DISCLAIMER OPINIONS: The opinions of the authors or reproduced in the articles are the ones of those stating them and it is their own responsibility. Should you find any incorrections you can always contact the newsdesk to seek a correction or right of replay.

DISCLAIMER PHOTOS: We mostly used photos images that are readily available online, from free sources, or from the people promoting the news. If by any chance it happens that we have used one of your copyrighted photos, please do not hesitate to contact us and we will take it down without question. We do not make profits as this is a not for profit project to give voice to the voiceless while giving them a platform to be informed also of general news, and it is completely free.