In view of the interinstitutional negotiations on the reform of the electricity market, the Presidency of the Council of the EU submitted two documents to the national delegations on Friday 21 April, setting out the initial feedback on the European Commission’s proposal of 14 March (see EUROPE 13141/1).
This two-part reform includes a revision of the Regulation and Directive to improve the design of the EU electricity market and a revision of the Regulations to improve the EU’s protection against market manipulation in the wholesale energy market (‘REMIT’).
Clarification of the ‘peak shaving’ principle
The European Commission’s reform proposal includes and defines the principle of ‘peak-shaving’, which is a set of measures to reduce gas consumption in the electricity sector by reducing demand during peak hours.
For the EU Council, the introduction of this principle into the market should take place within a short period of time, “so as to avoid reserving demand response capacity that could otherwise participate in wholesale electricity markets under normal conditions”.
Furthermore, its activation should be limited in time in order to limit distorting effects on the electricity market, and in particular any impact on the day-ahead price.
The EU Council document also states that the sizing of the peak shaving product by network operators should be limited, so that the expected costs do not exceed the expected benefits of the product.
Consideration of variable price contracts and supplier diversification
As regards the possibility of offering different contracts to consumers, the EU Council stresses the importance of variable price contracts, which remain essential to enable consumers to reduce their energy bills, “particularly with the increasing penetration of renewable energy sources”.
The EU Council also specifies the conditions for customers to choose different suppliers according to their needs, such as in the case of heat pumps or electric vehicles which require high consumption, but which also have the possibility to automatically adapt electricity consumption in response to price signals.
“To this end, customers will be entitled to have more than one metering and billing point covered by the single connection point for their facilities”.
The document goes on to say that the rules for allocating the associated costs should be determined at national level.
More precise definition of the conditions for energy sharing
The EU Council further defines the conditions for energy sharing between consumers, stating that active consumers who participate in energy sharing are financially responsible for the imbalances they cause and that this should not prejudice the possibility for active customers to delegate their balancing responsibilities to other market players.
“However, households with an installed capacity of up to 10.8 kW for individual households and up to 50 kW for multi-apartment buildings should not be required to comply with the suppliers’ obligations”, the document says.
A price crisis determined by the EU Council
With regard to public intervention to fix electricity supply prices in a crisis situation, the EU Council considers that it is its responsibility, and not that of the Commission, to determine, by means of an implementing decision, whether there is a crisis in electricity prices at EU level.
“Conferring implementing powers on the EU Council takes into account the political nature of the decision to trigger the extended possibilities for public intervention in the setting of prices for electricity supply, which requires a delicate balance between different political considerations”.
To see the document on the design of the electricity market: https://aeur.eu/f/6mb
To see the REMIT regulation document: https://aeur.eu/f/6mc (Original version in French by Pauline Denys)