Electricity market design: Europex urges continued focus on robust market principles

Brussels, 5 February 2018 | Europex generally welcomes the Council’s General Approach on electricity market design (recasts of the Electricity Regulation and Directive, as published on 20 December 2017) which makes positive steps towards achieving more integrated, liquid and efficient wholesale electricity markets in Europe. Properly functioning energy markets, and the resulting reliable price signals constitute the most effective means to meet the challenges of an evolving energy sector and to deliver energy to European citizens in a reliable, affordable and climate-friendly way.

While there are some aspects which we believe could be further improved in the Council’s General Approach, we welcome clarity on fundamental principles in the draft recast of the Electricity Regulation such as free and efficient price formation on the wholesale market (Art. 9). As attention now turns to the European Parliament and the subsequent trilogue discussions, Europex calls on policymakers to maintain focus on establishing robust market principles necessary for the proper functioning of the wholesale electricity market in Europe. In this context, we would like to highlight the following topics which need further clarification:

  1. Full market integration of renewables – Arts. 4 and 11
  2. Bidding zone configuration and capacity calculation – Arts. 13 and 14
  3. Capacity remuneration mechanisms – Arts. 8, 23 and 24
  4. Over the counter (OTC) long-term hedging opportunities – Art. 3
  5. Recognition of delegated operators – Recital 7a; Art. 2(2) ff; Art. 3(1); Art. 5(10)
  6. Balancing Energy Gate Closure Time and Imbalance Settlement Period – Art. 7(1) and 7(4)
  7. Flexibility for market operators to develop products that suit market needs – Art. 6(3)
  8. Electricity supply price regulation – Art. 5 of the draft Electricity Directive