The Swedish Presidency of the EU Council has sent a compromise document to the Member States which should serve as a basis for the adoption of a political agreement (‘general approach’) on the reform of the electricity market at the next Energy Council on 19 June (see EUROPE 13191/19).
This is the EU Council’s fourth revision of the Commission’s proposal of 14 March (see EUROPE 13141/1), divided between the regulation on the design of the electricity market and the regulation to combat manipulation of the wholesale energy market (REMIT).
PPA. In particular, the Presidency states that Member States must encourage PPA (Power Purchasing Agreement) contracts “by removing unjustified barriers and disproportionate or discriminatory procedures or charges”. These PPAs may include, but are not limited to, government-backed guarantee schemes at market prices, private guarantees or facilitating the pooling of demand for PPAs.
CfD. Contracts for Difference (CfDs) will apply to “new investments aimed at substantially repowering the capacity, increasing the output or extending the lifetime of existing electricity generation facilities”, according to the document.
A transitional period of three years has been added to take account of projects currently being developed in the Member States.
The rule whereby the revenue from these contracts for differences is distributed to final customers is maintained in the Presidency compromise, but Member States may also use them to finance the costs of direct price support schemes or investments aimed at reducing electricity costs for final customers under certain conditions.
Virtual hubs. Regional ‘virtual hubs’ are now subject to an impact assessment in the document. Following this analysis, the Commission adopts an implementing act which includes, in particular, a method for defining the geographical scope of virtual regional centres and a method for calculating reference prices.
Capacity mechanisms. A revision clause has been added requiring the Commission to submit a detailed report by 31 July 2024 assessing the scope for streamlining procedures within the current framework of capacity mechanisms.
In addition, the Commission should present proposals to simplify the evaluation process for capacity mechanisms by 31 December 2024 at the latest.
Exemption for fixed price contracts. One addition concerns the possibility for Member States to exempt suppliers who only offer dynamic price contracts from the obligation to offer fixed price and fixed term contracts, under certain conditions.
Energy sharing. On the subject of energy sharing, balancing responsibilities between active customers have been clarified in the Presidency document, and all the consumer rights and obligations set out apply to end customers participating in energy sharing programmes. Furthermore, according to the draft, the concept of energy sharing must not undermine the national rules applicable to the authorisation of suppliers.
Price crisis. Member States will be given greater leeway to decide whether to declare a crisis in electricity prices. “Member States, acting on a proposal from the Commission, should determine, by means of an implementing decision, when an electricity price crisis is occurring at regional or EU level”.
The decision must also specify its validity over time, which can be up to one year.
ACER’s role. With regard to the REMIT Regulation, EU market participants resident or established in a third country are now required to appoint a representative in the Member State where they do business, instead of declaring an office.
As regards the role of the Agency for the Cooperation of Energy Regulators (ACER), according to the draft, it may exercise its powers within the jurisdiction of the Member States, unless the NRA objects because it is investigating the same facts or had determined that there was no infringement following an investigation.
However, ACER may exercise its powers where the NRA fails to take the necessary measures to comply with a request from ACER in cases with a cross-border impact.
To see the regulations on electricity market design: https://aeur.eu/f/7b7
To see the REMIT rules: https://aeur.eu/f/7b8 (Original version in French by Pauline Denys)