Spain has achieved that the 27 members of the European Union have reached an agreement to reform the electricity market and apply a new price formation system that avoids volatility in the price of electricity such as that suffered by consumers and companies in recent years. years. This was announced by the European Commission after the meeting held this Tuesday by the EU Energy Ministers in a council that was anticipated to be complicated.
The reform aims to make electricity prices less dependent on volatile fossil fuel prices, protect consumers from price increases, accelerate the deployment of renewable energy and improve consumer protection. For the Minister of Ecological Transition, Teresa Ribera, the pact “would have been unimaginable just a couple of years ago. Thanks to this agreement, consumers across the EU will be able to benefit from much more stable energy prices, less dependence on the price of fossil fuels and better protection against future crises. “We will also accelerate the deployment of renewable energy, a cheaper and cleaner source of energy for our citizens.”
The reform aims to make electricity prices less dependent on volatile fossil fuel prices, protect consumers from price increases, accelerate the deployment of renewable energy and improve consumer protection.
Nuclear energy
Among other aspects, the role of electricity company contracts signed in the long term will be promoted in the face of the current volatile price system that registers peaks such as those of last year in which they far exceeded 300 euros per megawatt hour. Among the novelties of the reform of these contracts is the incorporation of nuclear energy along with renewable energy, one of the key aspects for France that the pact has allowed.
In addition, the use of capacity payments, the system by which an amount of money is paid to power plants so that they are available in case of system needs, will be rationalized.
The Council has introduced clarifications on customer protection provisions. Agreed to strengthen consumer protection by establishing free choice of supplier and the possibility of accessing dynamic electricity prices, fixed-term and fixed-price contracts, unless suppliers do not offer fixed contracts and as long as this does not reduce overall availability. of fixed contracts.
In addition, Member States may apply a limit on excess market revenues from electricity produced by generators with lower marginal costs, such as renewables, nuclear energy and brown coal (‘inframarginal generators’) until 30 June 2024, subject to the same conditions as the emergency. measure on inframarginal income adopted on October 6, 2022.
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