Press Release: EU Electricity Market Reform deal found; however, the wrong signal sneaks in

Publish date: December 18, 2023

In the early morning on Wednesday, the 14th of December, the Council and the European Parliament reached a provisional agreement to reform the EU’s electricity market design (EMD). This reform aimed to address Europe’s energy price crisis, move towards a long-term market structure and diversify away from fossil fuels. 

The text emphasises long-term contracts like Power Purchase Agreements (PPA) and Contracts-for-Differences(CfD) to boost the integration of renewable energy into our systems. The reform’s fundamental aim was safeguarding consumers from steep energy prices. While positive steps, such as the ban on power cuts, were taken, there’s room for further actions to enhance consumer protection. 

«While there’s a missed chance to allocate surplus CfD revenues directly to assist vulnerable consumers and support the uptake of energy efficiency solutions, we’re pleased that renewables supporting mechanisms are at the centre of this reform.»

Marta Lovisolo

Senior Policy Advisor, Renewable Energy Systems

This reform acknowledges the crucial role the grid will play in optimising the integration of renewables in the European power mix. The provisions mentioning capital and operational expenses in grid tariffs, the emphasis on anticipatory investments, and flexible grid connection agreements are clearly steps in the right direction. The features in the EMD should now be supported by promptly putting into action the measures outlined in the EU Action Plan for Grids. 

«We are disappointed with the agreement to continue subsidising fossil fuel power plants through capacity mechanisms. While stringent conditions have been added to the text, this goes directly against climate action and the direction to move away from fossil fuels that the EU was championing just a few days ago in Dubai. »

Ganni Vassallo

Policy Advisor, Electricity Grids

Read the full press release here:

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