EU Energy Ministers during the debate on electricity market reform Trilogues to begin on Thursday, October 19
European Union Energy Ministers reached an agreement yesterday on the reform of the electricity market aimed at reducing volatility, following a day of intense negotiations. The debate concluded with the assurance of incentives for nuclear power plants, as demanded by France. The main point of contention, the Contracts for Difference (CfDs) bidirectional contracts, will apply to investments in new nuclear, wind, solar, geothermal, and hydroelectric power plants without reservoirs.
New investments aimed at upgrading existing plants or extending their lifespan will also be eligible for these contracts. The Twenty-Seven agreed that CfDs would be the mandatory model used when public financing is involved in long-term contracts, with some exceptions.
These contracts will also be possible for some existing plants, with requirements in place to ensure a level playing field, in line with Germany's demands.The Council added flexibility regarding how revenues generated by the state through bidirectional CfDs would be redistributed. Revenues would be redistributed to end customers and could also be used to finance the costs of direct support schemes for prices or investments aimed at reducing electricity costs for end customers.In this regard, the Commission agreed to review Contracts for Difference to ensure compliance with state aid rules.
Capacity mechanisms The Council proposed changes focused on streamlining the process within the current framework of capacity mechanisms. It also asked the Commission to submit a detailed report evaluating other possible ways to simplify the application process for capacity mechanisms.Consumer protection Regarding consumer protection, Energy Ministers agreed to strengthen consumer protection by ensuring free choice of supplier and access to dynamic electricity prices, fixed-term contracts, and fixed-price contracts, unless suppliers do not offer fixed contracts and as long as this does not reduce the overall availability of fixed contracts.
They also agreed to protect vulnerable customers from disconnections by implementing "provider of last resort" systems that ensure continuity of supply, at least for domestic customers, in case such systems do not already exist.Furthermore, it was agreed that all customers would have the right to energy sharing systems (using, sharing, and storing self-generated energy) and that all consumer rights would be extended to end customers participating in energy sharing systems.
Consensus was achieved despite opposing views from Germany and France, with Hungary being the only country voting against. Trilogues will commence on October 19.
Source: El Economista