EU electricity market design: Future-proofing that supports competitiveness of the European economy is needed
20 February 2023 - On the envisaged reform of the EU electricity market design, BusinessEurope Director General Markus J. Beyrer said: "Future-proofing that supports competitiveness of the European economy is needed".
"Europe needs an evolution of the electricity market design that supports competitiveness of the European economy. The current pricing mechanism ensures short-term efficiency. To reach the ambitious European climate targets and at the same time guarantee security of supply, the EU should ensure a future-proof electricity market with clear long-term signals for investments.
Offering more hedging opportunities for consumers through long-term contracting is a low-hanging fruit for this reform to reduce the influence of gas price swings on consumers prices. The use of long-term contracts should be considered first before assessing whether changes to the pricing mechanism would be necessary.
The current energy crisis has brought to the light the often overlooked security of supply. Whilst we should continue to rely primarily on a market-based approach, capacity mechanisms should be assessed to ensure adequate investments in backup power capacities."
BusinessEurope position paper on the key principles for the reform of the EU electricity market design is available here.