The EU’s planned reforms aim to better protect electricity bills from market fluctuations
BRUSSELS, 23 january (Reuters) – Europe Proposals to overhaul the EU’s electricity market will seek to better protect consumers’ energy bills from short-term fluctuations in fossil fuel prices, Europe Commission said on Monday.
Russia gas The EU is reforming the energy market to avoid a repeat of last year, when supply cuts drove Europe’s electricity prices to record levels, raising bills for households and forcing some industries to close.
In a public consultation that began on Monday, the Commission in March offer as part of his planned market reform, he laid out numerous options for overhauling the way power plants sell electricity.
EU Energy Commissioner Kadri Simson said: “We need to design the electricity market for the future, enabling everyone to enjoy the benefits of affordable clean energy.”
The EU’s proposal would aim to expand Europe’s power plants’ use of long-term contracts – “contracts for difference” (CfD) and power purchase agreements (PPAs) – that provide a fixed price for electricity, the commission said.
The expansion of these types of contracts is unstable in short-term energy markets with energy consumers prices will provide more stable energy bills for households and businesses by creating a buffer between them, he said.
Fabian Ronningen, an analyst at Rystad Energy, said that at first glance, the Commission avoids the pitfalls of price caps that some market participants have warned against.
“They want to focus more on long-term contracts, CfDs and PPAs, which is a natural way to reduce price volatility when the target energy mix is more intermittent renewables, nuclear and hydro,” he said. he said.
The Commission said that stability for consumers would require the application of specific EU rules for CfDs and the decision to use them. national can be achieved by leaving it up to governments or requiring new power plants that receive government support to sign CfDs.
National More radical changes, such as allowing governments to apply CfD to some existing power plants, were also possible – although the Commission said this could create uncertainty over the risk of deterring much-needed investment in renewables.
CfDs and PPAs are not a magic wand, as someone long-term credit he had to take the risk.
France and Spain have already called for the expansion of CfDs for renewable energy and nuclear generators.
EU countries and legislators will discuss the final reforms in the energy market.
The Commission will make it easier for consumers to choose fixed-price electricity contracts to reduce their exposure to short-term price increases or non-gas discussed a number of other changes, such as extending a temporary EU measure that claws back windfalls from generators. .
Reporting by Kate Abnett; Supplement by Vera Eckert and Forrest Crellin reportedited by Jan Harvey, Jason Neely, Kirsten Donovan
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2023-01-24 06:32:36
Source – reuters
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