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Document 52023AR2118
Opinion of the European Committee of the Regions — Electricity market design
Opinion of the European Committee of the Regions — Electricity market design
Opinion of the European Committee of the Regions — Electricity market design
COR 2023/02118
OJ C, C/2023/253, 26.10.2023, ELI: http://data.europa.eu/eli/C/2023/253/oj (BG, ES, CS, DA, DE, ET, EL, EN, FR, GA, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
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Official Journal |
EN Series C |
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C/2023/253 |
26.10.2023 |
Opinion of the European Committee of the Regions — Electricity market design
(C/2023/253)
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I. RECOMMENDATIONS FOR AMENDMENTS
Amendment 1
Recital 1a (new)
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Text proposed by the European Commission |
CoR amendment |
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The green energy transition requires stronger involvement of citizens on the local level. Therefore, local and regional authorities shall develop climate-friendly energy supply roadmaps for their region, facilitate integrated network planning for electricity, heat and gases, facilitate citizen involvement for network and generation infrastructure and develop at local and regional level ‘one stop shops’ to facilitate customers a fair access to new energy schemes, technical assistance and regulatory support. |
Reason
Involving citizens is key for achieving the energy transition. Local and regional authorities shall be tasked to enable the energy transition on local and regional level by taking local responsibility and offering services to the citizens.
Amendment 2
Recital 1b (new)
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Text proposed by the European Commission |
CoR amendment |
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Energy prices have escalated since 2021 with very negative social and economic consequences. There is an urgent need to protect consumers in the face of rising energy prices, to deal with rising volatility and improve transparency in the price formation process. |
Reason
The energy crisis illustrates the need for better consumer protection in order to cope with adverse social and economic impact.
Amendment 3
Recital 7
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Text proposed by the European Commission |
CoR amendment |
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The current electricity market design has also helped the emergence of new and innovative products, services and measures on retail electricity markets, supporting energy efficiency and renewable energy uptake and enhancing choice so as to help consumers reduce their energy bills also through small-scale generation installations and emerging services for providing demand response. Building on and seizing the potential of the digitalisation of the energy system, such as active participation by consumers, should be a key element of our future electricity markets and systems. At the same time, there is a need to respect consumer choices and allow consumers to benefit from a variety of contract offers. |
The current electricity market design has also helped the emergence of new and innovative products, particularly at local and regional level, services and measures on retail electricity markets, supporting energy efficiency and renewable energy uptake and enhancing choice so as to help consumers reduce their energy bills also through small-scale generation installations, and emerging services for providing demand response. Building on and seizing the potential of the digitalisation of the energy system, such as active participation by consumers, should be a key element of our future electricity markets and systems. At the same time, there is a need to respect consumer choices and allow consumers to benefit from a variety of contract offers. |
Reason
The regional and local levels have become increasingly relevant e.g. in respect of aggregation of small flexible units and in exploring local flexibility mechanisms and in supporting the provision of knowledge and access to verifiable information.
Amendment 4
New recital 8
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Text proposed by the European Commission |
CoR amendment |
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The involvement of local and regional authorities in facilitating the energy transition at local level and ensuring participation of all citizens and the industry at local level can bring added value to a proper functioning of a new electricity market where the local level and distribution systems are playing a key role. In the context of the current energy challenges, a decentralised scheme is more suitable to facilitate the deployment of renewable energies. |
Reason
Local and regional authorities have a key role in the energy transition at local and regional level, among other things for developing and implementing roadmaps to achieve the energy transition and facilitating the involvement of citizens and local industry in the energy transition.
Amendment 5
Recital 10
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Text proposed by the European Commission |
CoR amendment |
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The changes to the electricity market design should ensure that the benefits from rising renewable power deployment, and the energy transition as a whole, are brought to consumers, including the most vulnerable ones, and ultimately , shield them from energy crises and avoid more households falling into energy poverty trap. These should mitigate the impact of high fossil fuel prices, notably that of gas, on electricity prices, aiming to allow households and companies to reap the benefits of affordable and secure energy from sustainable renewable and low carbon sources in the longer term. |
The changes to the electricity market design should ensure that the benefits from rising renewable power deployment, and the energy transition as a whole, are brought to consumers, especially the most vulnerable ones, and , first and foremost , shield them from energy crises and avoid more households falling into energy poverty trap. These should mitigate the impact of high fossil fuel prices, notably that of gas, on electricity prices, aiming to allow households and companies to reap the benefits of affordable and secure energy from sustainable renewable and low carbon sources in the longer term. |
Reason
The Regulation should be extended to all consumers, giving priority to vulnerable consumers. Protection must be extended to all circumstances of electricity production and sale, responding first and foremost to situations at critical moments.
Amendment 6
Recital 11
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Text proposed by the European Commission |
CoR amendment |
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The reform of the electricity market design should benefit not just household consumers but also the competitiveness of the Union’s industries by facilitating their possibilities to make the clean tech investments they require to meet their net zero transition paths. The energy transition in the Union needs to be supported by a strong clean technology manufacturing basis. These reforms will support the affordable electrification of industry and the Union’s position as a global leader in terms of research and innovation in clean energy technologies. |
The provision of electricity is a basic service to fulfil basic needs. The electricity system is part of the critical infrastructure. This electricity market design reform should benefit consumers, the technical security of the system, and the competitiveness of the Union’s industries by facilitating their possibilities to make the clean tech investments they require to make their transition towards the decarbonisation targets. The energy transition in the Union needs to be supported by a strong clean technology manufacturing basis, consumer engagement, access to clean technologies for all consumers and better understanding of local and regional needs . These reforms should also support the affordable electrification of the economy and the Union’s position as a global leader in terms of research and innovation in clean energy technologies. |
Reason
Local and regional authorities can contribute to a better understanding of the economic sectors concerned, always safeguarding the technical functioning of the electricity system and thus maximising the integration of renewable electricity production.
Amendment 7
Recital 28
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Text proposed by the European Commission |
CoR amendment |
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According to Article 15(8) of Directive (EU) 2018/2001 of the European Parliament and of the Council, Member States are to assess the regulatory and administrative barriers to long-term renewables PPAs, and shall remove unjustified barriers to, and promote the uptake of, such agreements. In addition, Member States are to describe policies and measures facilitating the uptake of renewables PPAs in their integrated national energy and climate plans. Without prejudice to that obligation to report on the regulatory context affecting the PPA market, Member States should ensure that instruments to reduce the financial risks associated to the buyer defaulting on its long-term payment obligations in the framework of PPAs are accessible to companies that face entry barriers to the PPA market and are not in financial difficulty in line with Articles 107 and 108 TFEU. Member States could decide to set up a guarantee scheme at market prices. Member States should include provisions to avoid lowering the liquidity in the electricity markets, such as by using financial PPAs. Member States should not provide support to PPAs that purchase generation from fossil fuels. While the default approach should be non-discrimination between consumers, Member States could decide to target these instruments to specific categories of consumers, applying objective and non-discriminatory criteria. In this framework, Member States should take into account the potential role of instruments provided at Union level, for instance by the European Investment Bank (‘EIB’). |
According to Article 15(8) of Directive (EU) 2018/2001 of the European Parliament and of the Council, Member States are to assess the regulatory and administrative barriers to long-term renewables PPAs, and shall remove unjustified barriers to, and promote the uptake of, such agreements. In addition, Member States , with contributions from local and regional authorities, are to describe policies and measures facilitating the uptake of renewables PPAs in their integrated national energy and climate plans. Without prejudice to that obligation to report on the regulatory context affecting the PPA market, Member States should ensure that instruments to reduce the financial risks associated to the buyer defaulting on its long-term payment obligations in the framework of PPAs are accessible to companies that face entry barriers to the PPA market and are not in financial difficulty in line with Articles 107 and 108 TFEU. Member States could decide to set up a guarantee scheme at market prices. Member States shall include provisions to avoid lowering the liquidity in the electricity markets, such as by using financial PPAs. Member States should not provide support to PPAs that purchase generation from fossil fuels. While the default approach should be non-discrimination between consumers, Member States could decide to target these instruments to specific categories of consumers, applying objective and non-discriminatory criteria. In this framework, Member States should take into account the potential role of instruments provided at Union level, for instance by the European Investment Bank (‘EIB’). |
Reason
Local and regional authorities have a key role in order to involve consumers at local and regional level. Making the inclusion of provisions to avoid lowering the liquidity in the electricity market mandatory.
Amendment 8
Recital 34
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Text proposed by the European Commission |
CoR amendment |
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Thanks to the upward limitation of the market revenues direct price support schemes in the form of two-way contracts for difference should provide an additional source of revenues for Member States in periods of high energy prices. To further mitigate the impact of high electricity prices on the energy bills of consumers, Member States should ensure that the revenues collected from producers subject to direct price support schemes in the form of two-way contracts for difference are passed on to all final electricity customers, including households, SMEs and industrial consumers, based on their consumption. The redistribution of revenues should be done in a way that ensures that consumers are still to some extent exposed to the price signal, so that they reduce their consumption when the prices are high, or shift it to periods of lower prices (which are typically periods with a higher share of RES production). Member States should ensure that the level playing-field and competition between the different suppliers is not affected by the redistribution of revenues to the final electricity consumers. |
Thanks to the upward limitation of the market revenues direct price support schemes in the form of two-way contracts for difference should provide an additional source of revenues for Member States in periods of high energy prices. To further mitigate the impact of high electricity prices on the energy bills of consumers, Member States should ensure that the revenues collected from producers subject to direct price support schemes in the form of two-way contracts for difference should be used to finance the support mechanism. Additional revenues shall be allocated to support vulnerable consumers, low-income households or vulnerable industrial consumers, or to enable local and regional authorities . The redistribution of revenues should be done in a way that ensures that consumers are still to some extent exposed to the price signal, so that they reduce their consumption when the prices are high, or shift it to periods of lower prices (which are typically periods with a higher share of RES production). Member States should ensure that the level playing-field and competition between the different suppliers is not affected by the redistribution of revenues to the final electricity consumers. |
Reason
The income from two-way contracts for difference should be used to finance the support mechanism. Additional revenues should be used in a targeted manner for those who need it most and where it can create the largest benefits for the energy transition.
Amendment 9
Recital 44
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Text proposed by the European Commission |
CoR amendment |
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Consumers should have access to a wide range of offers so that they can choose a contract according to their needs. However, suppliers have reduced their offers, fixed-price contracts have become scarce, and the choice of offers has become limited. Consumers should always have the possibility to opt for an affordable fixed price and fixed term contract and suppliers should not unilaterally modify the terms and conditions before such contract expires. |
Consumers should have access to a wide range of offers and transparent information so that they can choose a contract according to their needs. However, suppliers have reduced their offers, fixed-price contracts have become scarce, consumers are rarely aware of the different implications of fixed price contracts and variable price contracts and the choice of offers has become limited. Consumers should always have the possibility to opt for an affordable fixed price and fixed term contract and suppliers should not be able to unilaterally modify the terms and conditions before such contract expires. |
Reason
Consumers need to be able to receive transparent information on the offers available, whether at fixed or variable prices, in the most transparent manner possible. One-stop shops organized by local and regional authorities can help consumers find the most affordable and suitable electricity supply contracts.
Amendment 10
Recital 52
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Text proposed by the European Commission |
CoR amendment |
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Vulnerable customers should be adequately protected from electricity disconnections and should, as well, not be put in a position that forces them to disconnect. The role of suppliers and all relevant national authorities to identify appropriate measures, in both the short and the long-term, which should be made available to vulnerable customers to manage their energy use and costs remain essential, including by means of close cooperation with social security systems. |
Vulnerable customers and low-income households should be adequately protected from electricity disconnections and should, as well, not be put in a position that forces them to disconnect. The role of suppliers and all relevant national , regional and local authorities to identify appropriate measures, in both the short and the long-term, which should be made available to vulnerable customers and low-income households to manage rational energy use and associated costs, remain essential, including by means of close cooperation with social security systems. |
Reason
Local and regional authorities can contribute to identifying the best measures to manage the efficient and rational use of energy and associated costs for vulnerable customers and low-income households.
Article 1 — Amendments to Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (1)
Amendment 11
Article 1 point (a)
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Text proposed by the European Commission |
CoR amendment |
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point (a) is replaced by the following:
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Reason
The goal of achieving climate neutrality targets by 2050 requires the energy sector to already be a nearly decarbonised electricity sector by 2030 which thus explains the urgency of implementing the right tools to ensure investments in renewables, energy efficiency and security of supply.
Amendment 12
Article 4
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Text proposed by the European Commission |
CoR amendment |
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Article 4 is replaced by the following: ‘1. Member States shall put in place national strategies for the progressive reduction of existing coal, fossil gas and other solid fossil fuel generation, mining and transport capacity. 2. The Commission shall support Member States through all available means to enable a just transition in regions affected by structural change. The Commission shall assist Member States in addressing the social and economic impacts of the clean energy transition. 3. The Commission shall work in close partnership with the stakeholders in coal and fossil gas-intensive regions with high carbon emissions, shall facilitate the access to and use of available funds and programmes, and shall encourage the exchange of good practices, including discussions on industrial roadmaps and reskilling needs.’ |
Reason
All Member States shall have national strategies for reducing existing fossil fuel infrastructure to avoid stranded assets and to achieve the climate targets. The Commission shall especially assist regions affected by structural change.
Amendment 13
Article 7b(2)
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Text proposed by the European Commission |
Cor amendment |
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Member States shall establish requirements for a dedicated metering device data validation process to check and ensure the quality of the respective data. |
The requirements for a dedicated metering device data validation process to check and ensure the quality and interoperability of the respective data shall be in compliance with Regulation (EU) 2016/679, Article 23 of Directive (EU) 2019/944 and Network Code for Demand Response . |
Reason
Data protection is one of the main concerns regarding the use of smart metering and dedicated metering device data.
Amendment 14
Article 9(5)
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Text proposed by the European Commission |
CoR amendment |
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Where a regulatory authority considers that there are insufficient hedging opportunities available for market participants, and after consultation of relevant financial market competent authorities in case the forward markets concern financial instruments as defined under Article 4(1)(15), it may require power exchanges or transmission system operators to implement additional measures, such as market-making activities, to improve the liquidity of the forward market. Subject to compliance with Union competition law and with Directive (EU) 2014/65 and Regulations (EU) No 648/2012 and (EU) No 600/2014, market operators shall be free to develop forward hedging products, including long-term forward hedging products, to provide market participants, including owners of power-generating facilities using renewable energy sources, with appropriate possibilities for hedging financial risks against price fluctuations. Member States shall not require that such hedging activity may be limited to trades within a Member State or bidding zone. |
Where a regulatory authority considers that there are insufficient hedging opportunities available for market participants, and after consultation of relevant financial market competent authorities in case the forward markets concern financial instruments as defined under Article 4(1)(15), it may require power exchanges or transmission system operators to implement additional measures, such as market-making activities, to improve the liquidity of the forward market. Subject to compliance with Union competition law and with Directive (EU) 2014/65 and Regulations (EU) No 648/2012 and (EU) No 600/2014, market operators shall be free to develop forward hedging products, including long-term forward hedging products, to provide market participants, including owners of power-generating facilities using renewable energy sources, and within that category those using energy sharing , with appropriate possibilities for hedging financial risks against price fluctuations. Member States shall not require that such hedging activity be limited to trades within a Member State or bidding zone. |
Reason
The inclusion of the proposed amendment leaves no doubt that the article applies to energy sharing, a form of energy generation and use applying specifically to domestic consumers and based on clean and renewable energy.
Amendment 15
Article 19b(1)
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Text proposed by the European Commission |
CoR amendment |
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1. Direct price support schemes for new investments for the generation of electricity from the sources listed in paragraph 2 shall take the form of a two-way contract for differences. New investments for the generation of electricity shall include investments in new power-generating facilities, investments aimed at repowering existing power-generating facilities, investments aimed at extending existing power-generating facilities or at prolonging their lifetime. |
1a. Direct price support schemes for new investments for the generation of electricity from the sources listed in paragraph 2 shall take the form of a two-way contract for differences , except for projects equal to or below 1 MW or citizen energy community or renewable energy community projects equal to or below 6 MW. New investments for the generation of electricity shall include investments in new power-generating facilities, investments aimed at repowering existing power-generating facilities, investments aimed at extending existing power-generating facilities or at prolonging their lifetime. 1b. The level of direct support in the form of a two-way contract for difference should be determined through a competitive bidding process. |
Reason
Direct price support schemes shall be the default support mechanism for new renewable projects. Other support schemes can apply for small generation units. Clarification that competitive bidding processes should be used when allocating support via contracts for difference.
Amendment 16
Article 19b(2)
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Text proposed by the European Commission |
CoR amendment |
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Paragraph 1 shall apply to new investments in generation of electricity from the following sources: |
Paragraph 1 shall apply to new investments in generation of electricity from the following sources: |
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Reason
Direct price support schemes for new investments shall be open to technologies that are renewable, non-CO2 emitting, low-cost and available for a rapid roll out. Those technologies need to be complemented by flexible resources such as hydrogen power plants, storage, and demand response. Baseload power plants have limited flexibility and thus risk the loss of renewable energy feed-in during times of high renewable production. To achieve a nearly decarbonised electricity system by 2035, the quick build-up of renewable energy generation is key; technologies with long lead times come with a high risk of failing to achieve the climate targets. Decentralised renewable generators allow many municipalities to benefit from the income generated and thus create a fair distribution of revenues while only few municipalities benefit from centralised large power plants, particularly nuclear power which has not yet solved the problems of radioactive waste and missing water for cooling.
Amendment 17
Article 19b(3)
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Text proposed by the European Commission |
CoR amendment |
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Direct price support schemes in the form of two-way contracts for difference shall: |
Direct price support schemes in the form of two-way contracts for difference shall: |
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Reason
Income from two-way contracts for difference shall be used to finance the support scheme or to support vulnerable consumers. Two-way contracts for difference shall contain locational and system supporting elements to support investments in specific regions and e.g. allow for renewable power plants feeding in during demand peaks.
Amendment 18
Article 19c(4)
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Text proposed by the European Commission |
CoR amendment |
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The ENTSO for Electricity and the EU DSO entity shall coordinate transmission and distribution system operators as regards the data and analyses to be provided in accordance with paragraph 2. In particular, they shall: |
The ENTSO for Electricity and the EU DSO entity shall coordinate transmission and distribution system operators as regards the data and analyses to be provided in accordance with paragraph 2. In particular, they shall: |
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Reason
The analysis of flexibility needs shall be aligned with power sector decarbonisation scenarios in line with climate and renewable targets.
Amendment 19
Article 19f
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Text proposed by the European Commission |
CoR amendment |
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Flexibility support scheme for non-fossil flexibility such as demand response and storage applied by Member States in accordance with Article 19e(2) and (3) shall: |
Flexibility support scheme for non-fossil flexibility such as demand response and storage applied by Member States in accordance with Article 19e(2) and (3) shall: |
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Reason
Flexibility support schemes shall have a regional component to reflect potential network congestion and to allow for incentivising investments in structurally weak regions.
Amendment 20
Article 19g
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Text proposed by the European Commission |
CoR amendment |
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The EU renewable energy financing mechanism (Regulation (EU) 2020/1294 on the Union renewable energy financing mechanisms) should provide guarantees for PPAs and tender two-way contracts for difference in case the Commission concludes that the contributions of the Member States are insufficient for the collective achievement of the target according to the Renewables Directive (EU) 2018/2001 of at least 45 % share of energy from renewable sources in the Union’s gross final consumption of energy in 2030 based on its assessment of the integrated national energy and climate plans. |
Reason
The EU renewable energy financing mechanism can contribute to identifying and utilising the most efficient renewable projects across Europe, thereby boosting the energy transition. The EU renewable energy financing mechanism should be used to fill potential gaps between the contributions of Member States and the target share of 45 % from renewable sources in the Union’s gross final consumption of energy in 2030 in the Renewables Directive (EU) 2018/2001 of the European Parliament and of the Council. (2)
Article 2 — Amendments to Directive (EU) 2019/944 of the European Parliament and of the Council on common rules for the internal market for electricity (3)
Amendment 21
Article 15a
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Text proposed by the European Commission |
CoR amendment |
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1. All households, small and medium sized enterprises and public bodies have the right to participate in energy sharing as active customers. |
1. All households, small and medium sized enterprises and public bodies have the right to participate in energy sharing as active customers. |
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2. Member States shall take appropriate and non-discriminatory measures to ensure that energy poor and vulnerable households can access energy sharing schemes. Those measures may include financial support measures or production allocation quota. |
2. Member States shall take appropriate and non-discriminatory measures to ensure that energy poor and vulnerable households can access energy sharing schemes. Those measures may include financial support measures or production allocation quota. |
Reason
Clarification that energy sharing is generally subject to taxes, levies and charges, but that special network charges can apply within the same or neighbouring regional administrative units of the generation unit. An annual report on energy sharing gathers relevant information for future regulation.
Amendment 22
New Article 15b
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Text proposed by the European Commission |
CoR amendment |
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Article 15b Public action for the local energy transition |
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1. Local and regional authorities: |
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2. Local and regional authorities shall develop ‘one-stop shops’ to facilitate the energy transition. One- stop shops: |
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Reason
Involving citizens is key for achieving the energy transition. Local and regional authorities shall be tasked with enabling the energy transition on local and regional level by taking local responsibility and offering services to the citizens in the region. Facilitating the allocation of electricity below costs to consumers in need is made optional for local and regional authorities. One-stop shops shall also support energy communities with dedicated information.
Amendment 23
New Article 15c
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Text proposed by the European Commission |
CoR amendment |
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Article 15c Renewable energy systems below 1 kW All households have the right to connect renewable energy systems of up to 1 kW for self-consumption without further requirements, except for registering the system in a local or national database and compliance with the applicable electrical safety regulations. Member States shall put in place simple procedures to register these renewable energy systems. |
Reason
Small renewable energy systems can contribute to making the consumers less dependent on global commodity prices and create local support for the energy transition. Small renewable energy systems need to be compliant with the applicable electrical safety regulations.
Amendment 24
New Article 15d
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Text proposed by the European Commission |
CoR amendment |
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Article 15d Renewable energy communities and ownership |
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1. Renewable energy communities shall:
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2. Ownership of renewable energy projects developed by a renewable energy community or built for energy sharing shall be offered to purchase by the energy community, those involved in energy sharing and citizens, local and regional authorities and small and medium enterprises in the respective region. |
Reason
Involving citizens is key for achieving the energy transition. Energy communities can have a key contribution in involving citizens and making the energy transition happen on local level. Financial participation allows for sharing profits from the energy transition locally, which will increase support for the transition on local level. Adding conditions for preferential treatment for grid connections for energy communities.
Amendment 25
Article 18a
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Text proposed by the European Commission |
CoR amendment |
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1. National Regulatory Authorities shall ensure that suppliers have in place and implement appropriate hedging strategies to limit the risk of changes in wholesale electricity supply to the economic viability of their contracts with customers, while maintaining liquidity on and price signals from short-term markets. |
1. National Regulatory Authorities shall ensure that suppliers have in place and implement appropriate hedging strategies to limit the risk of changes in wholesale electricity supply to the economic viability of their contracts with customers, while maintaining liquidity on and price signals from short-term markets. |
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2. Supplier hedging strategies may include the use of power purchase agreements. Where sufficiently developed markets for power purchase agreements exist which allow effective competition, Member States may require that a share of suppliers’ risk exposure to changes in wholesale electricity prices is covered using power purchase agreements for electricity generated from renewable energy sources matching the duration of their risk exposure on the consumer side , subject to compliance with Union competition law. |
2. Supplier hedging strategies may include the use of power purchase agreements. Where sufficiently developed markets for power purchase agreements exist which allow effective competition, Member States may require that a share of suppliers’ risk exposure to changes in wholesale electricity prices is covered using power purchase agreements for electricity generated from renewable energy sources belonging to consumers for the duration of the risk exposure on the consumer side, subject to compliance with Union competition law. |
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3. Member States shall endeavour to ensure the accessibility of hedging products for citizen energy communities and renewable energy communities. |
3. Member States shall endeavour to ensure the accessibility of hedging products for citizen energy communities and renewable energy communities. |
Reason
The proposed amendment to the article clarifies the provision for the inclusion of the consumer as an active customer in the electricity market, within the period during which a risk of fluctuating prices exists.
Amendment 26
Article 27(1)
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Text proposed by the European Commission |
CoR amendment |
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Member States shall ensure that all household customers, and, where Member States consider it appropriate, small enterprises, enjoy universal service, namely the right to be supplied with electricity of a specified quality within their territory at competitive, easily and clearly comparable, transparent and non-discriminatory prices. To ensure the provision of universal service, Member States shall impose on distribution system operators an obligation to connect customers to their network under terms, conditions and tariffs set in accordance with the procedure laid down in Article 59(7). This Directive does not prevent Member States from strengthening the market position of the household customers and small and medium-sized non-household customers by promoting the possibilities for the voluntary aggregation of representation for that class of customers. |
Member States shall ensure that all household customers, and, where Member States consider it appropriate, small enterprises, enjoy universal service, namely the right to be supplied with electricity of a specified quality within their territory at competitive, easily and clearly comparable, transparent and non-discriminatory prices. To ensure the provision of universal service, Member States shall impose on distribution system operators an obligation to connect customers to their network under terms, conditions and tariffs set in accordance with the procedure laid down in Article 59(7) and with a maximum duration of six months between a request for connection and finalising the physical connection . This Directive does not prevent Member States from strengthening the market position of the household customers and small and medium-sized non-household customers by promoting the possibilities for the voluntary aggregation of representation for that class of customers. |
Reason
To achieve the climate targets including the 2030 targets the renewables build-up has to be accelerated. Barriers and delays have to be reduced. Tight deadlines are needed to enable the rapid build-up of renewables. Authorities and companies benefit from planning certainty.
Amendment 27
Article 28a
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Text proposed by the European Commission |
CoR amendment |
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Member States shall ensure that vulnerable customers are protected from electricity disconnections. This shall be provided as part of the concept of vulnerable customers pursuant to Article 28(1) of this Directive and without prejudice to the measures set out in Article 10(11). |
Member States , in cooperation with the Energy Poverty Advisory Hub, shall ensure that vulnerable and energy-poor customers are protected from electricity disconnections. This shall be provided as part of the concept of vulnerable customers pursuant to Article 28(1) of this Directive and without prejudice to the measures set out in Article 10(11). |
Reason
The Energy Poverty Advisory Hub should help identify vulnerable and energy poor customers and advise on the implementation of protection measures.
Amendment 28
Article 59(1) point (z)
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Text proposed by the European Commission |
CoR amendment |
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The regulatory authority shall have the following duties: monitoring the removal of unjustified obstacles to and restrictions on the development of consumption of self-generated electricity and citizen energy communities, including related to the connection of flexible distributed energy generation within a reasonable time in accordance with Article 58(d). |
The regulatory authority shall have the following duties: monitoring the removal of unjustified obstacles to and restrictions on the development of consumption of self-generated electricity and citizen energy communities, including related to the connection of flexible distributed energy generation within a reasonable time in accordance with Article 58(d) in close cooperation with local and regional authorities. |
Reason
Local and regional authorities have relevant knowledge for removing barriers for consumption of self-generated electricity, energy communities and connection of flexible distributed energy generation.
II. POLICY RECOMMENDATIONS
THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)
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1. |
welcomes the European Commission’s proposal to reform the EU’s electricity market design to ensure stability of supply, improve consumer protection and speed up the expansion of renewable energy; |
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2. |
highlights the need for an ambitious EU electricity market design in order to achieve the climate objectives, which will require an almost completely decarbonised electricity system by 2035; stresses the importance of consistency between the various packages of EU measures and highlights the need to enable robust investment in renewable energy generation and local and regional capacity in order to achieve the EU’s climate, security of supply and competitiveness objectives. |
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3. |
stresses the importance of openness to new and different technologies as a basis of the reform, with an appropriate and suitable legal framework that allows the deployment of affordable and sustainable energy technologies, including energy storage, limiting the dependence on fuels sourced from third countries; |
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4. |
underlines the proposal’s potential to decarbonise, decentralise and democratise the energy transition by means of a strong local and regional dimension; this will contribute to energy security and local value creation, produce economic benefits, and provide great opportunities for development, particularly for less developed regions; |
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5. |
in order to achieve the renewable energy target of at least 45 % of the overall energy mix by 2030 (4), calls for any gaps to be addressed using the EU renewable energy financing mechanism; |
Governance and democratisation of electricity markets
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6. |
stresses that the energy transition requires flexible, decentralised solutions such as promoting self-consumption, energy communities, decentralised storage facilities and simple feed-in options; calls for energy communities to be promoted, for procedures to be simplified, and for the public, small and medium-sized enterprises and local and regional authorities (LRAs) to be given the opportunity to be involved in and invest in local generation facilities. In many Member States, locally and regionally owned energy generation and distribution make a significant contribution to the energy supply, an important fact to build on; |
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7. |
recalls that changes to the current EU electricity legal framework require closer coordination between national actors. The amendments proposed set out a common approach and a balance between obligations and flexibility left to the Member States on how to ensure a lower cost of renewable electricity and the deployment of renewable energy to achieve climate objectives that can only be tackled by action at EU level. To accelerate the energy transition, EU action is needed as proposed by the Commission. |
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8. |
stresses that electricity supply must be guaranteed at all times for people in urban and rural areas, and also in island, mountainous and other remote regions, and in the outermost regions, and that place-based solutions are therefore necessary; |
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9. |
calls for local and regional authorities to be more heavily involved in the energy transition, and to this end proposes the creation of one-stop shops for the public at local level; recognising the importance of local and regional authorities, it is crucial to involve them actively in the design and implementation of the electricity market regulations. Their expertise and local knowledge can contribute to creating enabling conditions for the integration of renewable energy sources, demand response mechanisms, and innovative grid solutions; The creation of regional energy platforms or working groups, where local and regional authorities, energy companies, and relevant stakeholders can collectively design and adapt electricity market frameworks to local needs is a good way to collect local expertise and knowledge; |
Cheap and clean electricity for all
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10. |
welcomes the improvement in consumer protection brought about by the stricter rules on disconnections and the new principle of ‘suppliers of last resort’; calls for a robust social package, as mentioned in the resolution (5), and for Member States to get involved in the EU’s Energy Poverty Advisory Hub (6); |
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11. |
calls for incentives to be put in place for savings that benefit the system, for self-consumption and for electricity feed-in; Member States should by default permit and promote the installations up to 1 kW in and on buildings; |
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12. |
reiterates the call for a cheap (7), flexible, independent, decentralised, clean and sustainable energy system in which renewable energies guarantee security of supply, supported by flexible hydrogen power plants, energy storage and greater demand flexibility; |
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13. |
welcomes the introduction of State guarantees for long-term power purchase agreements (PPAs) and notes that they should be open to all consumers; |
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14. |
recognises that mandatory two-way contracts for difference (CfDs) are needed in order to skim off excess revenues in future price crises and to use them for specific purposes; |
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15. |
calls for location criteria to be used in CfDs and flexibility mechanisms, in order to ensure optimal integration of renewable energy and, in particular, to enable less developed regions to reap the benefits of cheap renewable energy; |
Strengthening the local and regional economy
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16. |
stresses the need to develop new business models with local economic cycles, for the future of the energy market; in particular, consumers should be encouraged to transition into active consumers and prosumers; |
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17. |
regrets that the European Commission’s proposal fully upholds the merit order principle for wholesale market pricing; calls on the European Commission to consider a reform and to commission a study, as otherwise there is a risk that the development of renewable energy will not have a positive impact on prices for end customers to the extent desired, even in the long term; |
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18. |
considers that time-of-use network tariffs should be used; these could be reduced if the feed-in and feed-out locations are located in the same or neighbouring local or regional administrative units; |
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19. |
urges the Commission to press ahead with the integration of markets across borders, as border regions are hubs between Member States and with other nation states; energy communities and energy sharing should also be possible across borders; |
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20. |
is convinced that digitalisation technologies can lead to a genuine transformation in the energy supply chain; calls for the faster deployment of smart meters in order to obtain real-time data on consumption and local generation; |
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21. |
points out that the outermost regions have isolated electricity systems which cannot be connected to the European continental grid. This means that tailored measures and investments are needed to achieve the market and energy transition objectives through the development of renewable energy and alternative low-emission and storage technologies; |
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22. |
stresses, finally, that this reform is just one of many building blocks in the success of the energy transition; is keen to see a more in-depth reform of the energy market in the European Commission’s new term, and also sees great potential in further strengthening LRAs in order to achieve a people-centred renewable energy system. |
Brussels, 5 July 2023.
The President of the European Committee of the Regions
Vasco ALVES CORDEIRO
(1) OJ L 158, 14.6.2019, p. 54.
(2) Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).
(3) Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ L 158, 14.6.2019, p. 125).
(4) Renewable Energy Directive (EU) 2018/2001.
(5) Resolution of the European Committee of the Regions — The outcome and follow up of the Conference on the Future of Europe (OJ C 375, 30.9.2022, p. 9).
(6) Energy Poverty Advisory Hub: https://energy-poverty.ec.europa.eu/index_en.
(7) World Nuclear Industry Status Report 2022 via Lazard, Figure 52: The Declining Costs of Renewables vs. Traditional Power Sources, https://www.worldnuclearreport.org/IMG/pdf/wnisr2022-figure52_lazard_lcoe_2021.pdf.
ELI: http://data.europa.eu/eli/C/2023/253/oj
ISSN 1977-091X (electronic edition)