2023-07-06 21:08:09
The four main groups in the European Parliament – the Group of the Progressive Alliance of Socialists and Democrats, the European People’s Party, Renew Europe and the European Green Party – have reached an agreement on Wednesday agreement on the amendments to the reform of the electricity market that softens the proposal initially raised by the MEP Nicholas Gonzalez Casares and your team. Thus, the text falls out of the imposition of putting a limit to the income of electric companies for crisis situationswhich was the measure most criticized by the power companies. But another one remains that companies do not like: the prohibition to cut the light to vulnerable consumers.
Of course, the agreement states that the European Comission will have to do a report before June 2024 accompanied by a legislative proposal that includes “temporary relief valve” measures for prices in case they shoot up. In case of energy crisisit is proposed obligate (before it was optional) to the European Commission to declare it, but the criteria are hardened. If in its first proposal Parliament established as a condition that the average price of wholesale markets with increase “by twice the average of the last five years and it is expected that it will continue like this for three months. The two conditions proposed by the Commission in its reform are now established, but the third is removed which pointed out that it had to have “a negative impact on the economy.”
Therefore, a crisis would be declared if the prices in the wholesale market rise two and a half times with respect to the previous five years and remain at that level for 6 months from a minimum price of 180 euros per megawatt-hour (MWh)and also the retail prices they increase by 60% (70% says the Commission proposal) with respect to the two previous years and when they are expected to continue in this way for 3 months (6 months in the Commission proposal).
The pact of this Thursday is, therefore, much more lax and close to what the European Comission In the beginning. The text still has to be voted on next July 19 at the Energy and Industry Committee of the European Parliament, but it does not have to be done fully. At the same time, the Twenty seven They will try to find a pact to give birth to their own text as soon as possible and, thus, be able to start the trialogue — the tripartite negotiation between Parliament, Council and European Commission— to try to reach a consent before the end of the year as you want spainwho is now in charge of distributing the times by holding the presidency of the Council of the European Union.
capacity markets
The main novelty includes eliminating the character of last resort of the capacity mechanisms –a payment for the capacity of a technology, not for its generation– and mandates the Commission to present a assessment on its introduction as a “structural element” of the design of the electricity market. That would be a little closer to the Spanish request to normalize this type of markets because they are essential for the storage technologies such as batteries, pumping and, above all, for the combined cycles. But at present it is very difficult to start them if it is not an emergency situation.
Among the novelties also appears the creation of a European auction system renewable energy to “complement” the efforts of the Member States in the objective of reaching 45% renewables in 2030. The auctions will be aimed at covering the objective of an additional 2.5% to the binding 42.5% in the event that Member States’ contributions do not reach 45%.
In addition, it is added that the regulatory authorities should promote the use of anticipated investmentsencouraging the acceleration of network development to meet the accelerated deployment from renewable generation and smart electricity demand, such as electric vehicles and heat pumps. The dealers should offer the possibility of flexible connections to make more efficient use of the available capacity of the networks and prevent renewable energy projects or electricity demand, such as electric vehicle chargers, from having to wait years for a connection point.
No change to CfDs
Both in the case of the Contracts for Difference (CfD) and the PPAs, they remain unchanged from the proposal of the European Commission, but it is added that the revenue must be directed to the vulnerable consumers by way of priority, to the energy transition, to offset their own costs and, in crisis situations, to the electro-intensive industry. On the other hand, for consumers, in addition to prohibiting power outages for the vulnerable, the definition of some thresholds from which it will be possible to introduce a procedure of power reduction and a mandate to Member States to adopt specific measures for the winter and summer seasons that allow domestic customers to manage their consumption and avoid high bills.
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