EC proposes electricity market reforms to boost renewables

European Commission has proposed reforming the EU's electricity market design to speed up the use of renewable energy.

Reforms as part of the EU's Green Industry Program aimed at improving the competitiveness of Europe's net-zero emission industry and providing better electricity price stability have been one of the main concerns of European solar manufacturers in order to be able to compete fairly with other countries. .

Several pieces of legislation will be reformed, including the Electricity Act, the Electricity Directive and the Wholesale Energy Market Integrity and Transparency (REMIT) Regulation, as well as measures to incentivize long-term contracts with non-fossil energy production.

The European Union's target to reflect the lower cost of renewable energy is likely to give further impetus to solar PV installations, as the EU plans to deploy 740GWdc of solar PV by the end of the decade as part of the REPowerEU strategy published last year.

EU Energy Commissioner Kadri Simson said: "The measures we are proposing today will increase the stability and predictability of energy costs across the EU. Increased investment in renewable energy will help us achieve our Green Deal targets and enable The European Union will become a clean energy powerhouse in the next few decades."

As the proposal includes measures to accelerate renewable energy deployment and phase out natural gas, it will further integrate renewable energy into the electricity system while improving access to flexible solutions such as storage or hydropower.

In addition, system operators need to increase the transparency of grid-connected capacity availability, while transaction deadlines will be brought closer to real time, to distribute better renewable energy transactions and balance flows.

Among the reforms, the EC will propose relaxing the deployment of more stable long-term power purchase agreements (PPAs) and requiring member states to ensure market-based guarantees for PPAs.

To provide electricity producers with greater stability and avoid price volatility, any public support for new investment in renewable energy will be provided through two-way contracts for difference (CfD).

Naomi Chevillard, Head of Regulatory Affairs at SolarPower Europe, said: “Households and businesses will be able to access PPAs more easily. Businesses will benefit from new government de-risking schemes that support their ability to sign these long-term energy supply contracts. Enhanced PPA legislation The framework will provide greater clarity for suppliers and buyers as they sign new agreements."

Also, one of the reforms involves the possibility for consumers to invest in solar parks and sell excess rooftop solar to neighbors, not just another potential source of revenue for suppliers.

Rooftop solar was also held in Strasbourg on Tuesday, as the European Parliament voted on the Energy Performance of Buildings Directive (EPBD), which will provide better support for rooftop solar across Europe and accelerate its deployment from 2025.

Jan Osenberg, policy advisor at SolarPower Europe, said: "The European Parliament's support for the European Solar Roofs initiative sends a clear signal that solar buildings are a key solution to reducing energy bills, ensuring energy security and meeting our climate goals."

Proposed reforms to the European electricity market will now be discussed and agreed by the European Parliament and Council before implementation.