On 18 December, the Council reached a general approach (negotiating position) on a directive setting out common rules to ensure that the internal electricity market in the EU is competitive, consumer-centred, flexible and non-discriminatory.
The directive, which is part of the clean energy package, puts particular emphasis on consumers and the importance of a well-functioning internal market. It gives more rights to customers, provides a balanced solution for regulated prices, sets out a regulatory framework for energy communities and defines the roles and responsibilities of market participants.
“Customers are our main priority in this legislation. Our aim is a competitive market that will ensure affordable electricity for all, but we will also give governments the option to help in cases of need. On the other hand, consumers will have the means to be active and engaged and make informed decisions. This ensures that the electricity market really delivers for the European people.” – said Mr. Kadri Simson, Minister for Economic Affairs and Infrastructure of the Republic of Estonia
This general approach will enable the Council to enter negotiations with the Parliament next year. The position of the Council, which builds on the Commission’s proposal, contains the following key elements:
In the future electricity market, electricity suppliers will be able to set prices freely. This will limit distortions, boost competition and lead to lower retail prices. Member states will be able to regulate prices temporarily to assist and protect energy poor or vulnerable household consumers. A number of market safeguards will be put in place to avoid cross-subsidies and discrimination of market participants, ensuring that the (cross-border) functioning of the wholesale market is not distorted.
Additionally, member states will ensure that the national regulatory framework enables electricity suppliers to offer a dynamic electricity price contract. By proposing these contracts and other tools such as smart meters,customers will be empowered and will become more engaged and active on the market. The agreement includes specific rules for the installation of smart meters, which are devices for measuring electricity consumption in real time.
A framework describing the role, functioning and treatment of the energy communities has been established to make sure that they contribute in an adequate and balanced way to the overall cost sharing of the system.
Regarding energy storage facilities, member states will allow, under certain conditions, both distribution system operators (DSOs) and transmission system operators (TSOs) to own, develop, manage or operate them. Public consultations will be carried out in order to assess the potential interest of market parties in investing in those facilities. The task of performing these consultations will be entrusted to DSOs together with the National Regulatory Authorities (NRA).
On 30 November 2016, the Commission presented the ‘Clean Energy for all Europeans’ package, aimed at implementing the 2015 strategy for an Energy Union with a forward-looking climate policy.
Four of the eight legislative proposals in the package seek to redesign the EU’s internal electricity market. Apart from this directive, it includes revised regulations on the internal electricity market and on a European Agency for the Cooperation of Energy Regulators (ACER), as well as a proposal for a new regulation on risk-preparedness in the electricity sector.
Source: The European Council