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REPORT (COM(2023)0148 – C90049/2023 – 2023/0077(COD))

On the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2019/943 and (EU) 2019/942 as well as Directives (EU) 2018/2001 and (EU) 2019/944 to improve the Union’s electricity market design

A-9-2023-0255

Committee on Industry, Research and Energy · Rapporteur: Nicolás González Casares

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Parliament's amended version of the Commission proposal to revise the EU electricity market design amends Regulations (EU) 2019/943 and (EU) 2019/942 and Directives (EU) 2018/2001 and (EU) 2019/944. It introduces peak shaving products, rules on dedicated measurement devices, forward markets and a single allocation platform, and a framework for power purchase agreements including a Union database and standardised contracts. It requires direct price support for new low-carbon generation to take the form of two-way contracts for difference, with revenues shared with final customers. It sets national flexibility assessments and objectives for demand response and energy storage, and allows capacity mechanisms and flexibility support schemes. It strengthens consumer rights: fixed-price contracts, energy sharing, suppliers of last resort, protection from disconnection, and regulated prices during a declared electricity price crisis.

Committee position. The Committee on Industry, Research and Energy proposes amendments to the Commission proposal to improve the Union's electricity market design, covering peak shaving, forward markets, power purchase agreements, two-way contracts for difference, flexibility, grid investment and consumer protection.

Key points

  1. Sets objectives for Regulation (EU) 2019/943 including climate neutrality by 2050, forward markets, consumer protection, flexibility and a framework for electricity price crises.
  2. Defines peak shaving, two-way contracts for difference, power purchase agreements, market revenue, dedicated measurement devices, flexible connection agreements and flexibility.
  3. Requires NEMOs to share liquidity by submitting all day-ahead and intraday orders to single coupling and not to trade such products outside it.
  4. Requires ACER to assess peak shaving products by December 2024; system operators may procure them during a declared electricity price crisis under conditions including a 100 kW minimum bid size.
  5. Allows access to and use of data from dedicated measurement devices for observability, settlement, flexibility services and energy sharing, with harmonised validation requirements.
  6. Sets the intraday cross-zonal gate closure time at no earlier than 30 minutes ahead of real time from 1 January 2026, with possible derogations, and minimum bid sizes of 100 kW or less.
  7. Requires transmission system operators to issue long-term transmission rights with maturities up to at least three years, and the Commission to assess regional virtual hubs and forward market solutions.
  8. Requires network tariffs to reflect fixed costs, incentivise anticipatory investments and flexibility, and allows flexible connection agreements where network capacity is limited.
  9. Requires Member States to remove barriers to power purchase agreements, the Commission to set up a market platform and a Union PPA database, and ACER to develop voluntary standardised PPAs.
  10. Requires direct price support for new wind, solar, geothermal, reservoir-free hydropower and nuclear generation to take the form of two-way contracts for difference, with revenues distributed to final customers.
  11. Requires national and ACER assessments of flexibility needs, national objectives for demand response and energy storage, and allows capacity mechanisms and flexibility support schemes for non-fossil resources.
  12. Requires fixed-term, fixed-price contracts of at least one year, energy sharing rights, suppliers of last resort, a ban on disconnecting vulnerable customers, and regulated prices during a declared electricity price crisis.

Who is affected

  • Electricity suppliers must offer fixed-price contracts, hedge their portfolios and act as suppliers of last resort.
  • Households and vulnerable customers gain protection from disconnection and access to energy sharing and regulated prices in a crisis.
  • Transmission and distribution system operators must publish grid capacity, offer flexible connections and issue long-term transmission rights.
  • Producers of new low-carbon electricity are subject to two-way contracts for difference for public support.
  • ACER, NEMOs and regulatory authorities take on new monitoring, assessment and approval tasks.

Figures and deadlines

  • EUR 584 billion investments needed for electricity grids until the end of 2030.
  • Minimum 15 % electricity interconnection target for 2030.
  • Peak shaving product minimum bid size of 100 kW.
  • Intraday cross-zonal gate closure time not earlier than 30 minutes ahead of real time from 1 January 2026.
  • Households with installed capacity up to 10,8 kW and multi-apartment blocks up to 100 kW exempt from supplier obligations for energy sharing.
  • Plug-in mini-solar systems of up to 800 W capacity promoted.
  • Electricity price crisis declared when wholesale prices reach at least two and a half times the previous 5-year average and at least 180 €/MWh for at least 6 months, and retail prices rise at least 60 % for at least 3 months.
  • Regulated prices limited to 80 % of median household consumption, 100 % for vulnerable households and 70 % of previous year's consumption for SMEs.

Legal basis: Article 194(2) of the Treaty on the Functioning of the European Union.