EU Parliament’s energy committee supports electricity market reform

The reform of the electricity market was on Wednesday backed by the Industry, Research and Energy Committee (ITRE) at the European Parliament.

In March, the European Commission proposed to reform the EU electricity market design in the wake of the energy crisis sparked by Russia's invasion of Ukraine. The changes are aimed at addressing price volatility and better supporting the green transition.

WindEurope welcomed the MEPs vote today, saying it largely backed the European Commission’s proposal for a targeted reform.

The energy committee supports the wider use of contracts for difference (CfDs) and highlights the importance of power purchase agreements (PPAs) in delivering stable prices for consumers and reliable revenues for renewable energy producers. The European Commission has to establish a marketplace for PPAs by the end of 2024.

According to WindEurope, by voting to avoid inframarginal revenue caps, the ITRE committee will help restore predictable business cases for renewables.

The committee's position allows for different routes to market for renewable power, namely CfD, PPAs and merchant investments, the industry group pointed out.

MEPs also supported the Transmission Access Guarantees (TAG) which will help de-risk investments in hybrid offshore wind farms, WindEurope added.

The decision will need to be cleared by the full House in a forthcoming plenary session. The next move will be for the European Parliament to start negotiations with the member states and the European Commission on a final deal. The EU electricity market design reform should be completed by the end of 2023.

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