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German industry hails EU Parliament position on electricity market reform

(EurActiv, 20 Jul 2023) The European Parliament’s minimalist approach to reforming the bloc’s electricity market has been warmly welcomed by Germany’s energy industry, who lobbied strongly against parts of the proposal.

The electricity market reform, tabled by the European Commission in March, seeks to avoid a repeat of last year’s energy crisis, which saw consumers faced with soaring energy bills due to record-high gas prices.

But as the dust settled, the appetite for far-reaching reform lessened, and energy companies pointed out key aspects of the planned reform they rather disliked: the EU, at the behest of Spain and Portugal, wanted to create permanent revenue caps on renewable energy producers, who have low marginal costs and earned windfall profits from high electricity prices even though their cost structure remained unchanged.

The EU Commission also sought to force mandatory Contracts for Difference (CfD) on EU member states as soon as they intervene on the market to support electricity production, a move the industry sees as an unnecessary straightjacket.

While the European Commission’s proposal was already considered low on ambition by some, the European Parliament is looking to scrap a fair share of it, including mandatory CfDs – in the name of protecting the EU’s functioning power market.

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EurActiv, 20 Jul 2023: German industry hails EU Parliament position on electricity market reform