The European Union reached a political agreement this Thursday to reform the community electricity market, in order to boost the deployment of renewable energies and promote stable and affordable prices for consumers.
“That’s it,” the main negotiator of the European Parliament (EP), Nicolás González Casares, responded to the EFE news agency, when speaking of the political agreement reached between the EP, the Council of the EU and the European Commission, after ten hours negotiations in Strasbourg, France.
Agreement that still must be validated by the Council of the EU, which represents the Member States, and the EP.
This is a market adjustment designed in the midst of the energy price crisis of 2021 and 2022, which aims to bring the EU closer to climate objectives and distance it from Russia’s 27 hydrocarbons.
The pact includes several measures to strengthen consumer protection and establishes criteria that allow the Council, on a proposal from the Commission, to declare an energy crisis.
States must take measures to reduce prices for vulnerable and disadvantaged customers, with provisions to avoid “undue distortions of the internal market”, the Council said in a statement.
“Consumer protection is considerably strengthened,” González Casares explained, adding that the pact also prevents companies from “unilaterally changing contracts” and states that “Member States will ensure that consumers are fully protected against cuts.”
The biggest obstacle in the process arose before the final negotiation between the Council and the European Parliament and arose in the confrontation between Paris and Berlin over contracts for differences (CfD) and its application to the operation of nuclear power plants.
CFDs allow the State to agree with a producer on a stable price for the purchase and sale of electricity during a certain period, and automatically reimburse the difference, depending on whether the final price is higher or lower than the agreed one.
The reform includes, in parallel, a regulation (REMIT) to improve protection against market manipulation, agreed last November.
In March of this year, the European Commission presented a proposal for the design of the market, which was previously worked on with the Member States to facilitate rapid processing.
Nine months later, an agreement was reached for the first deep reform of the electricity market in two decades, a pact that, if there are no surprises, will be officially approved at the beginning of 2024.
The President of the Spanish Government, Pedro Sánchez, referring this Wednesday to the six months of Spanish presidency of the Council of the EU before the plenary session of the European Parliament, described the adjustment as a “historic reform of the electricity market.”
“In addition to promoting the need to promote renewable energies, it will make electricity prices lower, more stable, it will provide greater transparency to the system and, therefore, more information to consumers” and “it will protect citizens from possible abuses by energy multinationals,” he stated.
Source: TSF
