欧洲电力行业联盟-欧洲电力市场设计的优先顺序三部曲（英）

EurelectricPrioritiesfortheElectricity

MarketDesignTrilogues

Eurelectricpositionpaper

November2023

EurelectricrepresentstheinterestsoftheelectricityindustryinEurope.Ourworkcoversallmajorissuesaffectingoursector.Ourmembersrepresenttheelectricityindustryinover30Europeancountries.

Wecovertheentireindustryfromelectricitygenerationandmarketstodistributionnetworksandcustomerissues.Wealsohaveaffiliatesactiveonseveralothercontinentsandbusinessassociatesfromawidevarietyofsectorswithadirectinterestintheelectricityindustry.

Westandfor

ThevisionoftheEuropeanpowersectoristoenableandsustain:

-AvibrantcompetitiveEuropeaneconomy,reliablypoweredbyclean,carbon-neutralenergy

-Asmart,energyefficientandtrulysustainablesocietyforallcitizensofEurope

Wearecommittedtoleadacost-effectiveenergytransitionby:

investingincleanpowergenerationandtransition-enablingsolutions,toreduceemissionsandactivelypursueeffortstobecomecarbon-neutralwellbeforemid-century,takingintoaccountdifferentstartingpointsandcommercialavailabilityofkeytransitiontechnologies;

transformingtheenergysystemtomakeitmoreresponsive,resilientandefficient.Thisincludesincreaseduseofrenewableenergy,digitalisation,demandsideresponseandreinforcementofgridssotheycanfunctionasplatformsandenablersforcustomers,citiesandcommunities;

acceleratingtheenergytransitioninothereconomicsectorsbyofferingcompetitiveelectricityasatransformationtoolfortransport,heatingandindustry;

embeddingsustainabilityinallpartsofourvaluechainandtakemeasurestosupportthetransformationofexistingassetstowardsazerocarbonsociety;

innovatingtodiscoverthecutting-edgebusinessmodelsanddevelopthebreakthroughtechnologiesthatareindispensabletoallowourindustrytoleadthistransition.

Dépôtlégal:D/2023/12.105/42

Markets&InvestmentsCommittee

Customers&RetailServicesCommittee

Distribution&MarketFacilitationCommittee

Contact:

AlessandroZAPPI–

azappi@

SavannahALTVATER–

salvater@

ChristianGRUBER–

cgruber@

DoniaPEERHOSSAINI–

dpeerhossaini@

CharlotteRENAUD–

crenaud@

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ElectricityMarketDesignReform:Eurelectric’sKeyAsksfortheTrilogues

TheongoingElectricityMarketDesignreformcomesatapointwhereweseeanurgentneedforasignificantroll-outofrenewableandlow-carbontechnologies,andgreaterinvestmentinthedistributionsystemwhichsupportsthem,tomeettheambitiousdecarbonisationtargetsneededfortheenergytransition.Visibilityonandstabilityoftheregulatoryenvironmentarekeyprerequisitesfortheseinvestmentstotakeplace.

Atthesametime,theEuropeanelectricitymarket'srobustperformanceinmaintainingcompetitiondespitehighenergyprices,itsvitalroleinavertingamoreseverecrisis,bolsteredbycross-bordertradingthatensuredEuropeansolidarityandsecurityofsupply,mustberecognisedandpreserved.

Inviewofthetriloguenegotiations,findbelowEurelectric’srecommendationstosecureadealaimingatprotectingconsumersfromthevolatilityofshort-termmarkets,solidifyingareliableinvestmentframework,strengtheningtheeffectivenessofpowermarkets,andshoringupadequacyneedstomaintainsecurityofsupply.

Striketherightbalancebetweenconsumerprotection&supplyregulationtoavoidunintendedconsequencesonretailcompetition.

•Ensuresuppliers’resiliencethroughstresstests:Theenergycrisisrevealedthatahandfulofroguesuppliersemployedriskybehavioursanddidnothedgeproperly.Normalisinghedgingstrategies,especiallybytyingthemtospecifichedginginstruments(e.g.,PowerPurchaseAgreements[PPAs]),isnottherightpolicytooltoensuretheresilienceandfinancialrobustnessofsuppliers.Suppliersarethemostwell-placedtoknowhowtohedgetheirportfoliobasedontheirmarket’sspecificities.Instead,wewouldrecommendempoweringnationalregulatoryauthorities(NRAs)tobeabletochecksuppliers’resilienceagainstmarketshocksthroughstresstests&reportingrequirementsandsupporttheParliament’sproposalsinthatregard(Art.18aDir).

•Allowsupplierstodevelopspecificoffersforspecificconsumers:Eurelectricdoesnotrecommendmakingfixed-priceproductsmandatoryasatoolagainsthighprices.Fixed-priceproductsoffercustomersalong-termviewoftheirenergycosts.However,giventheassociatedhedgingcosts,theydonotguaranteethelowestpriceforcustomersand,ifbadlydesigned,maynotalwaysincentivisecustomers’demandflexibility.Suchcontractsshouldbetiedtotherightforsupplierstochargeproportionateearlyterminationfeestoavoidthatsupplierssufferafinanciallosswhentryingtoresellthehedgedelectricityorwheretheyputthesystemoutofbalanceandincurimbalancecharges(Art.11Dir).

•Carefullyassessthecodificationofabanondisconnections:Whilewell-intendedtoprotectvulnerablecustomers,suchbansleadtoissueslikedebtstackingforthecustomerandsignificantdamageforsuppliersifcustomersarenotincentivisedtopaytheirbills.Suchprovisionsmustbelimitedtovulnerableandenergy-poorhouseholdcustomers,wherethesearenotsufficientlysecuredbysocialpolicymeasures,andnotbeextendedtocustomers“atriskofenergypoverty”orduringthetimeofjudicialproceedingsassuggestedbytheEuropeanParliament.TheseprovisionsneedtobecoupledwithmeasuresbytheMemberStatestoguaranteecompensationforassociatedlosses,asproposedbytheEuropeanParliament(Art.28aDir).

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Unlockinvestmentsneededtoachieveour2030decarbonisationtargetsthroughaclear,predictableandtechnologicallyneutralregulatoryframework.

•Definequantitativelyfocusedandwell-definedemergencycrisis-triggeringcriteriatoavoidcreatingadefactopermanentcrisis.ItshouldbeensuredthattheCouncilisinvolvedtogetherwiththeEuropeanCommissioninthetriggeringdecision,aswellasanydecisionregardingtheprolongationofthestateofcrisis.Furthermore,theintroductionofawholesalepricethreshold(atleast€180/MWh)couldgivepredictabilitytomarketparticipantsandreduceconcernsoverunexpectedmarketinterventions.Furthermore,weregrettheexclusionoftheyear2022fromthecalculationoftheaveragewholesalepricelevel(Art.66aDir).

•Avoidlockinginoutdatedsolutions:Crisesareunexpected.Lockinginsomemeasuresbasedonthepastenergycrisisisnotefficientforaddressingfuturecrises.Introducingpre-definedmeasuressuchasthecaptureofinframarginalrentsorasimilarmechanismsuchasa“temporaryreliefvalve”(asproposedbytheEuropeanParliamentinArt.69Reg)mustbeavoided.Protectingvulnerablecustomersshouldalwaysbeaddressedthroughsocialpolicymeasuresrootedintheexistinglegalframeworkandmustnotresultinsystemicmarketinterventionsofanykind.

•Fostertheimplementationoflong-termhedgingopportunitiesforcustomersandmarketparties:Directpricesupportschemes(i.e.,contractsfordifference[CfDs]orinstrumentswithequivalenteffect)andlong-termcontracts(i.e.,PPAs)allowbothconsumersandproducerstohavestablecontractpricesandassetrevenuesrespectively.Thesecontractsshouldremainvoluntary,technology-neutral,allocatedonacompetitivebasiswhenpossible,andshouldnotbeappliedretroactivelyinamandatorymanner.InvestmentsinexistingenergygenerationinfrastructureshallbefacilitatedthroughCfDsorsimilarmechanisms,exclusivelyforthepurposeofrepowering,capacityexpansion,andtheextensionoftheasset'soperationallife.Contractualinnovationshouldbepreservedwhenpublicsupportfornewinvestmentsisneeded(Art.19a&bReg).Long-termcontractdesignneedstobeadequatetoallowthedifferentinstrumentstocomplementeachother.

•Facilitatetheadoptionandimplementationofcapacitymarketswhereneeded:Toensureadequacyandsecurityofsupply,capacitymechanismscouldbeacorepartofthemarketdesign.MemberStatesshouldbeabletofreelychoosewhethertoimplementcapacitymechanisms.WewelcometheCouncil’sproposalaimingatremovingtheirtemporary/last-resortnatureandtheEuropeanParliament'sconcreteproposaltoeaseadoptionandimplementation(Art.22Reg).

Boostneededinvestmentsingridextensionanddigitalisation&unlockflexibilitypotential.

•Ensureimplementationofexistingprovisions:Implementationofexistingdemand-sideflexibilityandaggregationprovisionsintheElectricityDirective(Art.13,15,17,and32)-includingtheacceleratedroll-outofsmartmeterstoallcustomers-isano-regretoptionforlaggingMemberStates.WeagreewiththeCouncil’sproposaltoallowfortheuseofdedicatedmeasurementdevices,upontheconsentoftheSystemOperator,providedthatitisinteroperablewiththemainmeterandthatitmeetstechnicalrequirementswhichwillbedefinedintheNetworkCodeonDemandResponse(Art.7bReg).ThiswillprovideabridgeforMemberStatesthathavenotyetdeployedsmartmetersorwhosemainmeteringsystems

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currentlylackthetelemetriccapabilitiesneededtoadequatelypromotetheuptakeofflexibilityschemes.

•Promoteanticipatoryinvestments:Gridsarethebackboneoftheenergysystem,butwearelaggingonneededinvestmentsby2050whichamounttoanecessaryincreaseof+84%.Removingnationalbarrierstoinvestingingridsisakeyprerequisite.Inthetext,theprovisiononanticipatoryinvestmentsingridsispivotal,butfurtherclarificationabouttheregulatorytreatmentisneededtooperationalisethispossibilityinpracticeandensureSOsdonothavefinancialdisincentivesasaresult(Art.18(2)Reg).However,EUlegislatorsshouldnotrequiregeographicallydifferentiatedtariffstobeimplemented,asthisshouldbelefttotheMemberStates.

•Limittheuseofpeakshavingtoemergencysituations:Peakshavingproductscouldbeapotentiallydistortivetoolandtheproposedlimitationbyco-legislatorstoemergencycrises(i.e.,tyingthisprovisiontoArt.66aDir)iswelcome.Suchatoolshallbecarefullyassessed,assuggestedbytheEuropeanParliament,subjecttotheconditionofapositiveimpactassessmentandexpandedtoallSOs,transmissionanddistributionsystemoperators(TSOsandDSOs,respectively)(Art.7aReg).

•Considerallflexibilityoptionsinamarket-based,technologicallyneutralwayandincompliancewithdecarbonisationtargets:Allflexibilityoptionsshouldbeconsidered,withnopreferentialtreatmenttodemand-responseandstorage.Ifnecessarytocopewithobjectivemarketfailuresandfostertheirdevelopment,flexibilityoptionsmaybenefitfromadedicatedsupportinstrument,whichdoesnotdistortthefunctioningofexistingmarkets,andmustconsidertheremunerationalreadyreceivedfromcapacitymechanismswhenapplicable(Art.19eReg).

•IncludetheflexibilityassessmentinexistingEUlong-termscenarios:Tomaketheflexibilityassessmentaneffectivetooltofurtherenhanceflexibleassetsandservices,itshouldbedirectlyintegratedintoexistingassessmentsliketheEuropeanResourceAdequacyAssessmentandtheTen-YearNetworkDevelopmentPlan(Art.19cReg).

Fostertheimplementationofalreadyexistingprovisionswithoutcomplexifyingthemarketdesign.

•Ensurealevelplayingfieldbetweenenergysharingandtraditionalsuppliers:Energysharingshouldnotcreateaprofessionallycommercialisedalternativetotraditionalsupplywherecommercialenergysharerswouldnotbeheldtothesameregulationsandstandardsastraditionalenergysuppliers.Therefore,thegeographicallimitation,theintroductionofasharingorganiser,andtheclarificationoftheallocationofcostsassociatedwithenergysharingbytheEuropeanParliamentarenecessary.Furthermore,energysharingshouldalsonotintroduceunnecessaryandexcessiveobligationsforDSOs(Art.15aDir).

•Rejectinefficientandburdensomeproposalsforlong-termcontracts:Long-termcontractsareinstrumentalinshieldingconsumersfromshort-termvolatility.Obstaclestolong-termcontractingmustbeavoided.TheproposedUnionPPAdatabasemustberejectedsinceitwillonlyincreasebureaucracyandadministrativecostsformarketplayersandforcethemtodisclosecommerciallysensitivedata(Art.19aaReg).

•Implementquickwinstoimproveforwardmarketliquiditybeforeimplementinguntestedsolutions:Weopposetheideaofintroducingvirtualtradinghubsuntiltheirrelevancehasbeendemonstratedbyapositiveimpactassessment.WewelcometheParliament’sproposalstoaddressfirstquickwinstoenhanceandsupportforwardmarketliquidity,suchaslongermaturities,morefrequentauctions,andhighervolumesoflong-termtransmissionrightsor

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equivalentmeasures.TheproposedimpactassessmentshouldbebetterdefinedintheRegulation,includinganevaluationoftheallocationofcostsandrisksandaproperstakeholderconsultation.Moreover,additionalactionsaimingatimprovingtheliquidityoftheforwardmarketsuchasparticipatinginmarket-makingactivitiesshouldbeorganisedonavoluntarybasis(Art.9Reg).

•Rejectdisruptivesolutionswhichwillbedetrimentaltotheentiremarket:Theproposedshifttounit-basedbiddingbytheEuropeanParliamentwouldrepresentamajorchangeformostEUMemberStates.Suchashiftwouldresultinamorecostlyandinefficientbiddingprocessandwouldgoagainsttheprincipleofzonalmarketwhereanyassetcontributestothebalanceofabiddingzoneregardlessofitslocationandtype(Art.7.2ca;Art.7.2.fReg).

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ANNEX–OverviewofEurelectric’spositionperarticle

Topic

PreferredPosition

(Commission,

Parliament,

Council)

Explanations

Peakshaving(Art.7a-

Reg)

Mixofboth

institutions–see

Eurelectric

amendments

•Peakshavingproductsshouldbelimitedtoemergencycrisis(art.66a).

•Itshallbecarefullyassessed,assuggestedbytheEuropeanParliament,subjecttotheconditionofapositiveimpactassessmentandexpandedtoallsystemoperators,TSOsandDSOs.

DedicatedMeteringServices(Art.7b–Reg)

Council

•MainmeterscomplyingwiththeMeteringInstrumentsDirective(MID)shouldbethesinglepointofreferenceforsystemoperatorsforbalancing&settlement.Dedicatedmeasurementdevicesoftenoverlookdistributionlosses,hinderingcomprehensiveoversightbyDSOsandcausingissuesinbillinganddatamanagement.

SharingofOrderBooks

(Art.7.1&59.1(b)-Reg)

CommissionwithsomeproposalsfromParliament

•Removepartsintroducingthenotionof“undertaking”asitcouldbemisinterpretedasapplyingtomarketparticipantsholdingsharesinpowerexchanges.

•NarroweddownthescopetotheoriginalCommissionproposalandareaswithclearbenefitsinsharingintradayliquidity,removinganyreferencetoday-aheadmarketandpotentialbarriertolocalproductstrading.

Unit-BasedBidding(EP:

Art.7.2ca–Reg,Art.7.2.f

-Reg)

RejectParliament

•Theunit-basedbiddingshiftwouldrepresentamajorchangeformostEUMemberStatesandwillresultinamorecostlyandinefficientbiddingprocess.Moreover,itwouldgoagainsttheprincipleofzonalmarketwhereanyassetcontributestothebalanceofabiddingzoneregardlessofitslocationandtype.

ForwardMarketLiquidity

&VirtualTradingHubs

(Art.9-Reg)

Parliament

•Virtualhubsintroductionshouldbeconsideredonlyafterapositiveimpactassessment.

•WewelcomethatEPaddressesfirstquickwinstoenhanceandsupportforwardmarketliquidity,suchaslongermaturities,morefrequentauctions,andhighervolumesoflong-termtransmissionrightsorequivalentmeasures.

Gridsanticipatory

investments(Art.18.2-

Reg)

Parliament

•Theprovisiononanticipatoryinvestmentsingridsispivotal,butfurtherclarificationabouttheregulatorytreatmentisneededtooperationalizethispossibilityinpracticeandensureSOsdonothavefinancialdisincentivesasaresult.

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Long-termcontracts–PPAs(Art.19a-Reg)

Council

•PPAsshallremainatechnologically-openvoluntarylong-termcontractingmechanismforbothexistingandnewgenerationassets.

•Theproposedad-hocarticleonaUniondatabasebytheParliamentrisksofsubstantiallyincreasingbureaucracyandadministrativecostsformarketplayers,andtopublicdisclosecommerciallysensitivedatawhichwouldbeagainstcompetitionrules.

Long-termcontracts–CfDs(Art.19b-Reg)

Councilincluding

theParliament

proposaltoallow

forequivalent

mechanisms

•WewelcometheCouncil’sapproachpreservingvoluntaryparticipationofmarketparticipantsaswellasthatprovisionsonCfDsfocusonnewpower-generationfacilities.Thus,limitingthepossibilityofamandatoryretroactiveapplicationonexistingassets.Furthermore,itprovidesdetaileddesigncriteriaapplyingtoallCfDs-e.g.preventingdistortiveeffectsondispatch,operationandtrade(cf.Art.19b-1a).WhilemandatingtheCommissiontoassesscompliancewithStateAidrulesandtheabove-mentionedcriteria.

•Additionally,MemberStateshallhavesufficientflexibilityontheallocationofrevenues(orequivalentinfinancialvalue)toreduceelectricitycostsforfinalcustomers.

•However,wewelcomethereferencetocontractualinnovationintheParliament’spositionstressingtheimportanceofincludingnotonlyCfDsbutalsoequivalentmechanisms.

Flexibilityprovisions(Art.

19c&e-Reg)

Parliamentwith

someproposals

fromCouncil

•Wewouldwelcomeaneconomicsystem-wideassessmenttoaddressflexibilityneedsandultimatelysecureadequacyinthemostcost-efficientway.Flexibilitysolutionsshouldbecomparedagainstallthealternatives.Consideringthis,wewelcometheParliament'sproposalchargingACERtodrawupareportattheUnionlevelandtheuseofnationalreportsasafeed-intotheERAA,TYNDP,andNDPs(cf:Art.19c&Art.19d).

•WhileParliament’sproposalisappreciatedforreferencinghydropowerasaflexibilityasset,theCouncil'sversionispraisedforsimplifyingthearticleandallowingforalternativemeasurestoachieveflexibilitytargets(cf:Art.19e).Eurelectricadvocatestomaintaintechnologicalneutralityforeconomicallyefficientflexibilityservices.However,flexibilitysupportschemesshouldnot

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distortthefunctioningofexistingmarketsandmustconsidertheremunerationalreadyreceivedfromcapacitymechanismswhenapplicable.

Emergencymeasures(EP:

Art.69-Reg,Council:Art.

66a(8))

RejectParliament&Council

•Introducingpre-definedmeasuressuchasthecaptureofinframarginalrentsorasimilarmechanismsuchasa“temporaryreliefvalve”mustbeavoided.

•Avoidextendingthecaponinframarginalrentuntil30thJune2024(asforeseenintheCouncilGeneralApproach).

Fixed-priceproducts(Art.

11+Art.12.3-Dir)

Council+

Eurelectric

amendment

to

addressearly

terminationfees

•Proposedderogationtofixed-priceproductsobligationiswelcome.Suchcontractsoffercustomersalong-termviewoftheirenergycosts,butgiventheassociatedhedgingcosts,theydonotguaranteethelowestpriceforcustomers.

•Suchcontractsshouldbetiedtotherightforsupplierstochargeproportionateearlyterminationfeestoavoidthatsupplierssufferafinancialloss.Thiscrucialpointremainstobeaddr