Proposal for a Regulation amending Regulations (EU) No 1227/2011 and (EU) 2019/942 to improve the Union’s protection against market manipulation in the wholesale energy market

Summary:

Legislative initiative tabled by the European Commission on 14 March 2023, introducing amendments to Regulation (EU) No 1227/2011 and Regulation (EU) 2019/942 to improve the European Union's (EU) protection against market manipulation in the wholesale energy market. This is a text with EEA relevance.

Further information:

Regulation (EU) No 1227/2011 - also known as the Wholesale Energy Market Integrity and Transparency (REMIT) Regulation - established a framework for monitoring wholesale energy markets. Regulation (EU) 2019/942 updated the role of the EU Agency for the Cooperation of Energy Regulators (ACER).

Energy prices increased significantly in 2021 and 2022. They were rapidly felt by households, industry and businesses across the EU, and governments sought to address them. At an EU-level, a Toolbox was provided to tackle high prices, in particular for the most vulnerable consumers, as well as the REPowerEU action plan comprising further measures and funding to boost energy efficiency and renewable energy. This was followed by the creation of a temporary State Aid regime to allow certain measures to soften the impact of high prices, among other measures. All together, the measures helped Member States to deal with the immediate impact of the energy crisis. However, the crisis also highlighted the lack of resilience to energy price spikes. For this reason, the President of the European Commission announced in September 2022, during her State of the European Union (SOTEU) address, the need for a fundamental reform of the electricity market design.

This draft law addresses concerns over exposure to volatile short-term prices, driven by high prices of fossil fuels. It seeks to complement the short-term markets with a greater role for longer-term instruments, through Power Purchase Agreements (PPAs) and more prudential obligations for energy suppliers. It aims to clarify access to longer term contracts for developers. It also proposes measures to improve the way variable renewable and low carbon energies are integrated into the short-term market.

The proposal was adopted by the European Commission on 14 March 2023 as part of a legislative package seeking to reform the EU's electricity market design.

• Primary Source

Official

EUR-LEX: SWD(2023)58: Staff Working Document accompanying the Proposal - Reform of Electricity Market Design https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2023:58:FIN

European Commission: Topics: Electricity market design https://energy.ec.europa.eu/topics/markets-and-consumers/market-legislation/electricity-market-design_en

European Commission: Press Release, 14/03/2023: Commission proposes reform of the EU electricity market design to boost renewables, better protect consumers and enhance industrial competitiveness https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1591

European Commission: Questions and Answers on the revision of the EU's internal electricity market design (14 March 2023) https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_1593

European Commission: Opening remarks by Commissioner Simson at the press conference on the reform of the EU's electricity market design (14 March 2023) https://ec.europa.eu/commission/presscorner/detail/en/speech_23_1658

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