On 18 December in Brussels, European Ministers responsible for energy reached a political agreement of principle (general approach) on the revision of common rules for the liberalisation of the internal electricity market in the EU based on a flexible solution that allows for regulated prices on a temporary basis.
The revised directive on common rules for the internal electricity market was proposed in November 2016 by the Commission as part of the clean energy package and a sub package on the electricity market design. It seeks to guarantee a more competitive, more flexible and non-discriminatory way of functioning by making it more consumer centred.
These new rules give consumers more rights, provide a balanced solution for regulated prices, sets out a regulatory framework for energy communities and defines the roles and responsibilities of market participants.
In view of the trialogue negotiations with the European Parliament and the Commission at the beginning of 2018, the agreement in principle concluded by the ministers is based on several key factors.
In the future electricity market, electricity suppliers will be able to set prices freely. This will limit distortions, boost competition and lead to lower retail prices.
Member states will be able to regulate prices temporarily, however, to assist and protect energy poor or vulnerable household consumers. They will, however, have to put in place a number of market safeguards to avoid cross-subsidies and discrimination of market participants, ensuring that the (cross-border) functioning of the wholesale market is not distorted.
Additionally, member states will ensure that the national regulatory framework enables electricity suppliers to offer a dynamic electricity price contract. By proposing these contracts and other tools such as smart meters, which include specific rules, dynamic pricing contracts will empower customers and make them more active on the market.
The agreement also establishes a framework describing the role, functioning and treatment of the energy communities has been established to make sure that they contribute in an adequate and balanced way to the overall cost sharing of the system.
Regarding energy storage facilities, member states will allow, under certain conditions, both distribution system operators (DSOs) and transmission system operators (TSOs) to own, develop, manage or operate them. Public consultations will be carried out in order to assess the potential interest of market parties in investing in those facilities. The task of performing these consultations will be entrusted to DSOs together with the National Regulatory Authorities (NRA).
Kadri Simson, the Estonian Minister for the Economy stated, “Our aim is a competitive market that will ensure affordable electricity for all, but we will also give governments the option to help in cases of need”. (Original version in French by Emmanuel Hagry)