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HomeLatest NewsBrussels focuses the reform of the electricity market on long-term contracts

Brussels focuses the reform of the electricity market on long-term contracts

Date: March 31, 2023 Time: 10:11:16

The European Commission presents this Tuesday its proposal for the reform of the electricity market, which will be focused on increasing the presence of renewables to the detriment of fossil fuels and facilitating long-term contracts in order to reduce price volatility to protect consumers. consumers According to the draft, to which Europa Press has had access and which is subject to change until its official publication, Brussels will encourage Member States to “strive” to create the right market conditions for long-term instruments based on in the market, such as power purchase agreements.

These are bilateral purchase agreements between energy producers, particularly renewables, and trading companies that, according to the text, “provide long-term price stability for the consumer and the necessary certainty for the producer to make the decision to investor”. Once the Commission has presented the proposal, it is up to the Council and Parliament to support it at the level of both States and political groups, before the final negotiation again with Brussels and with the aim of starting to apply it in the first half of 2024.

The president of the European Commission, Ursula von der Leyen, has defended agreeing on the reform of the electricity market at the beginning of 2024, in any case before the European elections in May, after defending that it is a “mature” proposal that benefits the final consumer of affordable green energy production. In an interview with a group of agencies from the European Newsroom, the leader of the Community Executive has indicated that the proposal that he presents this Tuesday for a new design of the electricity market reduces the impact of gas on the price of electricity and seeks to lower the bill to the consumer, in line with greater investment in renewable energy.

“We see that we have a spot market that works well, but we have to improve on long-term contracts,” he said, referring to new types of contracts that include the Brussels initiative. “At the center of this reform are consumers, and the main objective of this reform is to bring the benefits of low-cost renewable energy closer to consumers,” she added.

“Limited” review

However, in the face of the structural reform defended by countries like Spain, another bloc of seven countries led by Germany claims that the review of the electricity market be “limited” and that it maintain the benefits reported by the system in the last decade and that it does not compromise the climate and energy objectives of the EU, two opposing positions that augur a long debate at the level of the Twenty-seven.

After announcing last Thursday a relaxation of State aid that allows critical EU countries, two complementary regulations that seek to prevent business migration and achieve European self-sufficiency in the production of new technologies while reducing emissions of CO2. All these measures are part of the Brussels plan to counteract the impact on the European economy of the injections of the American Inflation Reduction Act (IRA), with a package of 369,000 million dollars, and the investments in clean technologies announced by China, which exceed 280,000 million dollars.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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