The high electricity prices of the last few months have given rise to calls for a reform of the European electricity market. Now the European Parliament has reacted.
Electricity customers in the EU should be better protected from price fluctuations in the future. In Brussels, the European Parliament gave the green light for a reform of the electricity market, which negotiators from EU states and MPs agreed on at the end of last year. This means that consumers should have the right to both fixed-price contracts and contracts with dynamic prices. EU countries can also prohibit suppliers from turning off electricity to defaulting customers.
The core element of the reform are new long-term contracts between governments and electricity producers, so-called Contracts for Difference. With these contracts for differences, states guarantee electricity producers a minimum price for electricity if they make new investments in renewable energies or nuclear power. If the market price falls below an agreed price, the state steps in and makes up the difference. If the price is higher, the surplus goes to the state. This is intended to create incentives for the domestic production of clean electricity.
Due to extremely high electricity prices, calls for a reform of the European electricity market had become loud. The reason for the high prices was, among other things, exploding gas prices due to the Russian war of aggression on Ukraine. It was also noticeable that around half of France’s nuclear power plants temporarily failed.
The basis for the agreement that has now been found was a legislative proposal from the EU Commission from the spring. The EU states still have to agree to the project, but this is considered a formality.
Source: Stern
