EU signals bloc-wide renewable energy subsidies, wants demand response equality


Shining ambition: European Commission plots sweeping change to Europe's energy market.

The European Commission has signalled impending changes to EU energy legislation as it attempts to take greater control over national energy policies.

The Commission gave further clues about its Energy Union ambitions, today publishing a summer package of proposals and issuing a consultation on major structural changes to the European energy system.

While national governments may be implementing subsidy cuts to renewable power, the Commission said it remains committed to becoming the world leader in renewable energy. That goal will require a “fundamental transformation of Europe’s electricity system including the redesign of the European electricity market.”

Quite what that may mean for the remits of national regulators and policymakers remains unclear. However, the Commission clarified its thoughts on co-ordinating renewable energy support mechanisms.

“Renewable energy producers need to be able to compete on an equal footing with conventional energy producers,” it stated. “Where public support is still required to ensure this, considerable efficiency gains could be made by converging renewables’ support schemes across borders, particularly through enhanced regional cooperation.”

The Commission will also legislate for better interconnection, smarter grids and more transparent and dynamic energy trading and pricing models to be made available across the bloc so that intermittent generation can be better traded and managed across borders.

In a public consultation on the new market design, the Commission also underlined a commitment to demand side response. It may give an indication of how any legal challenges, such as that lodged by Tempus Energy against the UK’s capacity mechanism, may fair.

“Market rules are not always conducive to the participation of aggregators yet. It may be desirable to develop a common approach to market design for enabling demand response to compete on an equal footing with generators,” states the consultation document.

Following public consultation on the electricity market design, the Commission said it will prepare legislative proposals in the second half of 2016. It mooted possible amendments to the internal market legislation, Renewables Directive, Energy Efficiency Directive and Infrastructure Regulation.

See the consultation here.

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