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DRAFT 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

ITRE-PR-747032

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

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The rapporteur's draft report sets out Parliament's position on the Commission proposal to amend Regulations (EU) 2019/943 and (EU) 2019/942 and Directives (EU) 2018/2001 and (EU) 2019/944 to improve the Union's electricity market design. It amends the proposal to add a temporary cap on producers' market revenues at EUR 180 per MWh during a declared electricity price crisis, and to require two-way contracts for difference for new non-fossil generation. It strengthens consumer rights: fixed-price contracts cannot be changed unilaterally, vulnerable customers cannot be disconnected, and suppliers of last resort must be appointed. It adds rules on power purchase agreements, including a Union database and standardised contracts, and on energy sharing limited to the same distribution area. It requires assessments and national objectives for demand response and energy storage, and provides for peak shaving products during price crises.

Committee position. The rapporteur proposes to amend the Commission proposal to add a temporary cap on market revenues, strengthen consumer protection, facilitate power purchase agreements, set national objectives for demand response and storage, and require assessments before introducing regional virtual hubs.

Key points

  1. Member States must apply a temporary cap on producers' market revenues at EUR 180 per MWh during a declared electricity price crisis, covering wind, solar, geothermal, hydropower, biomass, waste, nuclear, lignite, oil and peat.
  2. Direct price support schemes for new non-fossil electricity generation must take the form of two-way contracts for difference, with revenues passed to final customers, prioritising vulnerable customers and those affected by energy poverty.
  3. Member States must facilitate power purchase agreements, set up guarantee schemes, and the Commission must establish a Union PPA database and a trading platform by 31 December 2024.
  4. The Commission, with NEMOs, must develop standardised PPAs with shorter durations, different price formulas and load-profile shaping, for voluntary use.
  5. Member States must prohibit electricity disconnections of vulnerable customers and those affected by or at risk of energy poverty, and ensure supply to cover basic needs.
  6. Suppliers must not unilaterally modify or terminate fixed-term, fixed-price contracts, and final customers must be able to request such contracts of at least one year.
  7. Member States that do not have a supplier of last resort must appoint one, ensuring continuity of service until a new supplier is found, and may extend it to SMEs during a price crisis.
  8. Member States must define separate quantifiable national objectives for demand response and energy storage, reflected in their national energy and climate plans, and the Commission must assess them and propose a Union strategy by June 2025.
  9. Transmission and distribution system operators may procure peak shaving products during a declared electricity price crisis, limited to demand response, with contracts concluded no more than a week ahead.
  10. The Commission must assess the impact of regional virtual hubs for the forward market and accompany it with a legislative proposal where appropriate.
  11. Member States must allow customers and market participants to use data from dedicated measurement devices for observability, settlement and flexibility services, with uniform validation requirements.
  12. The right to participate in renewable energy sharing is limited to the same electricity distribution area and excludes private enterprises whose participation is their primary activity; third-party facilities are capped at 100 kW.

Who is affected

  • Electricity producers, who face a cap on market revenues and must use two-way contracts for difference for new non-fossil generation.
  • Households, SMEs and vulnerable customers, who gain protection from disconnection and the right to fixed-price contracts.
  • Suppliers, who must hedge appropriately, cannot unilaterally change fixed-price contracts, and may be appointed as suppliers of last resort.
  • Transmission and distribution system operators, who may procure peak shaving products and must publish capacity information monthly.
  • Member States, which must set national objectives for demand response and energy storage and facilitate PPAs.

Figures and deadlines

  • EUR 180 per MWh, the cap on market revenues for electricity producers during a price crisis.
  • 100 kW, the maximum capacity of a third-party renewable energy generation facility for energy sharing.
  • 10.8 kW for single households and 50 kW for multi-apartment blocks, the installed capacity below which households are not required to comply with supplier obligations in energy sharing.
  • 80% of median household consumption and 100% for vulnerable customers, the limits for regulated prices during a crisis.
  • 1 January 2026, the deadline for the intraday cross-zonal gate closure time to be at the earliest 30 minutes ahead of real time, with possible delay to 1 January 2028.
  • 31 December 2024, the deadline for the Commission to establish a platform for trading power purchase agreements.
  • 1 March 2024, the deadline for ENTSO for Electricity and the EU DSO entity to submit a proposal on data and methodology for flexibility assessments.
  • 20%, the minimum share of shared electricity from public authority energy sharing projects to be made accessible to vulnerable households.

Legal basis: Article 294(2) and Article 194(2) of the Treaty on the Functioning of the European Union.