An overhaul of EU electricity market rules was informally
agreed to tackle barriers to cross-border trade of
electricity and create a real European electricity market
where 70% of all electricity can cross EU borders freely.
This will make it easier to integrate renewable energy in
the electricity grid and hence support efforts to reach the
EU’s binding goal of 32% renewables by 2030. In addition,
it strives to make the EU’s electricity market more
competitive and consumer-oriented.
A better deal for consumers
Consumers will benefit substantially from the new rules,
which include:
- Switching - electricity providers must offer consumers
the option to switch provider (with no fees) within a
maximum period of three weeks (and 24 hours by 2026);
- Smart meters - consumers will have the right to get
smart meters to control their consumption, unless analysis
in a given member state shows that the cost outweighs the
benefits;
- Price comparison: consumers will have access
free-of-charge to an online price comparison tool;
- Dynamic price contract: consumers will also be able to
opt for a dynamic electricity price contract from energy
companies with more than 200.000 clients.
No more state subsidies to the most polluting coal
power plants
EU rules currently allow national authorities to pay
conventional power plants to be on stand-by for a limited
period of time if there is a demand peak or temporary
shortage of renewable energy (e.g. wind and sun), known as
capacity mechanisms.
As requested by Parliament, the agreed text provides for an
additional EU assessment (together with national ones) on
the risks of a possible electricity shortage in member
states to avoid unnecessary use of these exceptions.
In addition, stricter limits for member states willing to
subsidise power stations as a capacity mechanism shall
prevent the most polluting coal power plants in Europe from
receiving state aid. Power stations emitting more than 550
gr of CO2/kilowatt hour of electricity shall not receive
subsidies from the state to remain on stand-by in case of
demand peak of electricity. The measures will apply to all
new capacity mechanisms from date of entry into force of
the Regulation and to existing ones from 2025.
Energy poverty and price regulation
Member states will be able to regulate prices temporarily
to assist and protect energy-poor or vulnerable households,
negotiators agreed. Preference should however be given to
addressing energy poverty through social security systems.
EU member states that still regulate household prices may
continue to do so but they shall submit reports to assess
the progress towards abolishing price regulation. By 2025
the Commission shall submit a report on overall EU
progress, which may include a proposal to end regulated
prices.
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After the deal was reached, rapporteur KrišjÄnis KARIÅ…Š (EPP,
LT) said: “This agreement is good for the climate
and good for the wallet. It will help the transformation to
cleaner electricity production and it will make the
electricity market more competitive across EU borders.
Parliament has succeeded in getting rid of heavy state
subsidies, so that the market can do its job of supplying
EU industries and households with affordable and secure
energy.”
Next steps
The deal will now be put to the Industry, Research and
Energy Committee and plenary for approval as well as to the
Council. The Regulation and the Directive will enter into
force 20 days after publication. Member states will have to
implement the Directive by 31 December 2020.
