Amsterdam, 11/04/2016 (Agence Europe) - The future European electricity market and the role of the regional electricity markets was central to the discussions of the informal meeting of the energy ministers of the EU under the Dutch Presidency, in Amsterdam on Monday 11 April. The ministers gave the Commission areas on which to focus its work. Following its initiative, presented in July 2015 to redesign the electricity market, the Commission will be presenting a legislative proposal in the second half of 2016.
“This meeting gave us the opportunity to provide political direction at an early point ahead of the proposal the Commission is to present later this year”, the Dutch Minister for Economic Affairs, Henk Kamp, summed up in a statement published after the work, which ended without a press conference as there was insufficient media representation present.
This work comes as part of the initiative taken by the Commission in its first raft of measures for the implementation of the Energy Union project, in summer 2015, to redesign the single market for electricity to allow it to manage large-scale cross-border flows and greater volumes of intermittent electricity from renewable sources (see EUROPE 11356).
Whilst stressing the importance of having a “common approach” to the aim of bringing about the Energy Union, the ministers agreed on the need for reinforced regional cooperation as a “springboard” to an integrated single energy market, Kamp explained. Regional cooperation can help to respond to the current energy challenges: the integration of more renewable energies in the energy system and the creation of a situation of fair competition for all producers; breathing new life into cross-border trade and the creation of a more flexible and better integrated energy system; and security of supply at affordable prices, he stressed.
“The first step the member states have to take in order to facilitate a single European energy market is to connect with their neighbours. Regional cooperation may vary in terms of scope and priorities and the extent to which it is carried out politically. Some member states are already pooling interests and connecting their networks and markets”, Kamp told ministers on Monday morning. He referred to the example of the Pentalateral Energy Forum (Benelux, Germany and France) that focuses on the integration of the electricity markets by sharing capacities and increasing cooperation for the security of supply, and to the wind power network in the North Sea, in which the participating countries' intention is to work together to bring down the costs of offshore wind energy.
“The integration of the regional markets could increase energy security, bring down prices and promote increased integration of renewable energies. Furthermore, it will promote more cooperation between businesses and institutions for more innovation, more new business models and more profitable market opportunities. And ultimately, it will be easier to integrate a small number of regional energy forums than 28 different energy policies”, he stressed.
The signature of a joint political declaration on energy cooperation between the Netherlands and Belgium, on the sidelines of the meeting, is another excellent example.
On Monday, the ministers agreed on several “key elements” of the forthcoming work for the new electricity market. They stressed the need for the full implementation of the existing legislation and better functioning of the markets in the short term in order to guarantee operators the right price signals. They agreed on that coordination must be improved between member states on devising regimes to support renewable energies. They also found common ground over the need for concrete cooperation in the design and operation of the electricity markets in order to improve the security of supply in the EU and the member states, also highlighting the requirement for increased cooperation in generation adequacy assessments and between network managers to develop a common approach in times of shortages. Finally, they agreed that the demand side could be an important instrument to create flexibility, through the more active involvement of consumers. “That means that consumers must have access to more variable tariffs and that we have to create opportunities for new players in the market”, Kamp stressed.
The Commission, represented by Energy Commissioner Miguel Arias Canete, confirmed that it was in the “preparation stages” for a legislative proposal on the future single electricity market, which it will unveil in the second half of 2016 in the framework of the package for the revision of the renewable energy legislation. “We are in a preparatory stage of reflection”, a Commission source told us. “We don't yet know whether we are going to tweak the existing legislation, or propose a framework or something new”, our source continued, adding that the proposed text would take the form of the directive. (Original version in French by Emmanuel Hagry)