Photo: MEP Krisjanis Karins

MEP Karins report on market design

By Christophe Arnaud, Policy Advisor

Two weeks ago, MEP Krisjanis Karins published his draft report on the revision of the electricity regulation and the electricity directive. He proposes a stronger emphasis on a market-based development of the electricity system. Proposals towards short-term and more granular markets, allowing scarcity pricing, go in the right direction as this would allow more renewables integration. He also confines the recourse to capacity remuneration mechanisms (CRMs). They would be linked to an objective assessment of resource adequacy at European level.

Member States would be obliged to develop measures addressing the issues identified. Such a framework would ensure capacity payments to be a last resort and a temporary solution to a resource adequacy problem. It would also be in line with the decarbonisation objectives of the EU as the carbon emissions criterion is maintained.

In line with his vision of a pure market-based development of the actors of the electricity system, the specific regimes granted to renewables in terms of balancing responsibility and dispatching rules were taken out of his report. Such legal framework changes would not be fit to the situation in many EU Member States where the lack of transparency and openness of markets could make it hard for new players with specific characteristics such as solar, and especially small installations, to compete on a level-playing field with conventional players.

On the other hand, the principle of renewables curtailed as last resort proposed by the Commission is maintained by the rapporteur. These proposals will be discussed for the first time on 11 July by the other Members of the ITRE committee in the European Parliament. They will have the opportunity to table amendments themselves by September, and the final position of the ITRE committee should be adopted in November.

Read the full report here.


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