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CE: Energy market reform will support consumers and industry by stimulating investments in clean energy

22 May 2024
Raluca Galeata

The European Commission welcomed the adoption of important reforms of the electricity and gas market and the new regulatory framework to stimulate the development of hydrogen and other decarbonized gases, according to a statement from the Community Executive.

These reforms highlight Europe’s determination to continue the clean energy transition, while strengthening security of supply and consumer protection, and capitalizing on the lessons learned from the energy crisis.

Energy markets adapted to the demands of the future will stimulate investments in clean energy and facilitate lower and more stable prices, which are essential for European industry to become more competitive on the world stage. With the adoption of the revised electricity market organization and the gas and hydrogen decarbonisation package, the EU has additional tools to achieve its energy and climate goals under the European Green Deal. The updated natural gas market framework gives member states the possibility to stop or limit both pipeline gas and liquefied natural gas (LNG) imports from Russia and Belarus, in line with REPowerEU objectives, according to Agerpres.

The reform of the electricity market offers consumers a wider range of contracts and clearer information before signing contracts. They will have the option to lock in safe and long-term prices, as well as have dynamic pricing contracts to take advantage of price variability to use electricity when it is cheaper. Member States will have to establish suppliers of last resort, so that no consumer ends up without electricity. Vulnerable consumers and those affected by energy poverty will be protected against disconnection, and Member States will be able to extend regulated retail prices to households and SMEs in case of crisis. In addition to consumer protection, energy sharing is also strengthened. For example, tenants will be able to share excess solar energy on rooftops with a neighbor.

The reform will also help European businesses remain competitive by giving them access to more predictable energy costs. This creates the conditions for both suppliers and consumers to benefit from the expanded use of longer-term market instruments such as power purchase contracts, two-way contracts for difference and forward contracts. This will provide security in terms of investments, both to electricity producers and industrial consumers.

In general, both households and businesses will be able to benefit from the lower costs of renewable energy sources, the integration and availability of which will also be boosted by the new provisions on grid congestion, trading deadlines, demand side response and storage, as well as auctions at the EU level.

Also, to ensure that the EU population will benefit from competitive markets with transparent price setting, the Agency for the Cooperation of Energy Regulators (ACER) and national regulators will have an increased capacity to monitor integrity and transparency the energy market.

The new framework for the gas market will facilitate the use of gas from renewable sources and with low carbon dioxide emissions, while ensuring the security and accessibility of energy for all European citizens. The reform of the natural gas market ensures that decarbonized gases and hydrogen can circulate throughout Europe. In particular, the reforms will lead to the creation of a market for hydrogen, which will be essential for reducing emissions in hard-to-reduce sectors such as heavy industry and transport. The Commission will also test a five-year project to bring together hydrogen supply and demand to improve market development and transparency within the European Hydrogen Bank.

Consumers will be better protected against supply and price risks. They will be empowered to take an active role in the market and select cleaner goods and contracts. In practice, they will be able to switch suppliers more easily, use effective price comparison tools, get accurate, fair and transparent billing information and have better access to data and new smart technologies.


Autor: Raluca Galeata

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