MEPs Nicolás González Casares (S&D, Spanish) and Maria da Graça Carvalho (EPP, Portuguese) presented their respective reports on the design of the electricity market and the revision of the REMIT regulation (see EUROPE 13182/7) to tackle manipulation in the wholesale energy markets to the Industry, Research and Energy (ITRE) Committee on Tuesday 23 May. While both reports received positive opinions, there are still points of divergence, notably concerning the capping on inframarginal revenues in the first report.
Electricity market design
Nicolás González Casares highlighted the proposed amendments aimed at providing greater protection for the most vulnerable consumers, compared to the European Commission’s initial proposal (see EUROPE 13141/1), and returned to the role of over-the-counter contracts, known as PPAs, whose revenues he would like to see “considered a priority for consumers in need”.
He also wants to facilitate access to this type of contract for small private players, notably by creating a specific platform for PPAs.
The rapporteur also returned to the mechanism for declaring a price crisis.
While some MEPs are calling for more flexibility in the crisis criteria so that Member States can decide whether there is a crisis in their country and intervene, it is the introduction of capping on inframarginal revenues at €180 per megawatt/hour in the event of a crisis that has raised a lot of eyebrows from several MEPs and the European Commission.
They believe that this measure will create “uncertainty” and a slowdown in investment in renewable energy.
“This goes against the spirit of the internal market, increases uncertainty for investors and therefore should not be the subject of structural measures, even less so in times of crisis”, said Maria da Graça Carvalho, shadow rapporteur on the text.
MEP Jutta Paulus (Greens/EFA, German) called on negotiators not to introduce amendments that are “too restrictive” for a temporary situation. “Do not change long-term plans to deal with a short-term crisis. We must ensure that we have a market that will work for a climate-neutral Europe. This is the goal we must aim for”.
Mr Casares replied that a strong message had to be sent. “Renewables also protect the citizen and an affordable price can only be achieved by introducing emergency situations. Because if we tell people that we are introducing more renewables and that they have to pay €400, they will no longer believe in us”.
Furthermore, all MEPs welcomed the proposal to strengthen cooperation between Member States so that 15% of electricity is interconnected.
Several of them also welcomed the capacity mechanisms, which will be recognised as structural elements of the market.
REMIT Regulation
Regarding the REMIT regulation aimed at avoiding speculative mechanisms and market abuse, Maria da Graça Carvalho insisted on consistency and legal transparency, reducing the administrative burden, but also strengthening the European dimension, by modifying the criteria for defining cross-border cases and reinforcing the investigative capacities of ACER (Agency for the Cooperation of Energy Regulators) while ensuring a balance between the role of the EU and that of the national authorities.
“Some people think we are going too far in strengthening national authorities, others not far enough. This is a crucial discussion that we will be engaged in”, said the rapporteur at the end of the debate.
A second point that has given rise to different opinions is the access of ‘participating third countries’, outside the market, which conclude commercial contracts with subjects within the EU market. Some argue in favour of maintaining the Commission’s proposal and call for the removal of “barriers for these third parties”, allowing them to have a site in the EU.
“Having a more open, more consistent market is again a crucial debate” stressed Maria da Graça Carvalho. “I hope to create a common understanding for these policy elements”.
The draft report also introduces an amendment asking the Commission to carry out an evaluation of the regulation by 27 June. (Original version in French by Pauline Denys)