At the Energy Council on Monday 16 December, the Director of the Agency for the Cooperation of Energy Regulators, Christian Zinglersen, presented two reports on the development of electricity markets, including an assessment of the electricity infrastructure and an analysis of security of supply, emphasising the need to control system costs.
According to the first report, network costs could rise by 20-40% by 2030, “and even by 100% by 2050”, while annual investment in electricity networks is set to double to up to €100 billion a year.
For ACER, the general costs of the electricity system, including network costs, but also expenditure associated with support schemes such as national capacity mechanisms, “must be kept under control, as they are one of the main factors in the cost of electricity” that impact on the EU’s competitiveness.
In the second report, ACER points out that the costs of these capacity mechanisms (remunerating capacity or flexibility) have risen by 40% between 2022 and 2023, reaching €7.4 billion.
According to ACER, as costs rise, recovery mechanisms fail to provide consumers with adequate price signals, thus “limiting their ability to adjust consumption and reduce peak demand effectively”.
In addition, fossil fuels have secured 85% of the EU’s capacity mechanism payments for 2035, which “risks delaying the decarbonisation of the electricity sector”.
ACER also regrets that there is still no joint infrastructure planning (electricity and gas) by the European bodies responsible for managing the gas and electricity transmission networks.
Generally speaking, the Agency is calling for better use to be made of existing networks to increase their capacity before building new ones, and for a more coordinated approach between Member States to reduce the costs of security of supply and to determine whether infrastructures are keeping pace with the energy transition.
To see the report on electricity infrastructure: https://aeur.eu/f/eu4
To see the one on security of supply: https://aeur.eu/f/eu5 (Original version in French by Pauline Denys)