EU negotiators meet today to begin talks on reforming the EU’s electricity market design rules. The outcome of the discussions will dictate the pace and cost of the clean energy transition and the creation of a truly competitive, flexible and consumer-centred electricity market.
The European Parliament, Council and European Commission will meet for the first informal “trilogues” to discuss and seek political agreement on a host of issues under the Market Design Initiative (MDI).
ClientEarth law and policy advisor Julie Finkler said: “Revising the electricity market design legislation provides a unique opportunity to create a distributed, efficient and flexible energy system suited for the uptake and integration of renewables.
“The EU needs to be ambitious in setting rules and criteria that support the participation of citizens and energy communities in the renewable energy system. If we want to decarbonise our system to meet our targets in the Paris Agreement, we need to enable active participation in the energy transition.”
To ensure a positive outcome, ClientEarth strongly encourages EU legislators to agree on a new legal framework that:
- Supports a truly integrated EU electricity market that promotes pooling together generation or demand resources across the EU to integrate renewables more rapidly and reduce costs for consumers;
- Promotes energy communities that prioritise local, social, economic or environmental benefits for its members;
- Incentivises electricity customers to adapt their consumption in response to market signals to reduce their energy costs and contribute to a flexible energy system;
- Guarantees that electricity network operators act as neutral market facilitators and provide the right incentives to make their grids smarter and more flexible;
- Ensures that a new EU level entity for electricity distribution system operators (DSOs) – the “EU DSO body” – is accountable and guarantees fair treatment and representation of all member DSOs.
The new electricity market design should not allow capacity mechanisms that artificially support or subsidise otherwise uneconomic and aging fossil fuel infrastructure. To minimise the environmental and competition impacts of capacity mechanisms, negotiators should guarantee that no capacity payments to new or existing power plants emitting more than 550g CO2/kWh should be allowed after the new market design rules are agreed.
ClientEarth energy lawyer Sam Bright added: “The proposed ‘550 rule’ is a vital opportunity for the EU to crack down on government subsidies for its most polluting power plants. Throwing hundreds of millions of Euros at these dirty old plants every year via capacity mechanisms is madness – and will stop the EU and Member States from meeting their Paris Agreement obligations.
“The EU’s coal plants all need to shut by 2030 at the latest, and it’s essential to stop giving them unfair financial advantages over other, cleaner technologies.”
Trilogues on the MDI are expected to continue until December 2018.