A Guide to EU Electricity Market Design Negotiations

Reaching our targets will require that solar developers have a preserved access to all routes to market. Competitive auctions for Contracts for Difference (CfDs) are a useful tool to support deployment, however we must also incentivise merchant access, notably via Power Purchase Agreements (PPAs).

• Keep CfDs voluntary, competitive and reserved to new investments (Article 19b) 

• Support Power Purchase Agreements for consumers while removing unnecessary tools such as the PPA database and auction selection criteria that privilege hybrid PPAs and CfDs projects (Article 19a) 

Remove inframarginal caps at EU level & harmonise the conditions for declaring an energy emergency.

The uncoordinated application of national revenue caps and other emergency measures have harmed investments in renewables. The EU market design should provide clear legal certainty for years to come. 

• Do not extend the possibility for Member States to apply national revenue caps (Article 66a) 

• Define robust EU-wide conditions for declaring emergency, using cumulative conditions including the threshold of €180/MWh (Article 66a) 

Energy sharing optimises energy cost reductions and local grid management by maximising the use of available rooftop space, opening the scheme to customers with diverse load profiles, and delegating administrative complexity to third parties.

• Allow all customers to have the right to participate in energy sharing as active customers, going beyond households, SMEs, and public bodies, while including a capacity threshold at 6 MW for third-party owned or managed assets (Article 15a) 

Grid connection is too burdensome, long, and not anticipated proactively enough. Aa forward-looking energy regulation is needed via early grid planning, anticipatory investments, and digitalised processes for grid connections.

• Entitle all grid users using a Power Control System to receive a flexible (non-firm grid) connection offer (Article 18 Directive)

• Mandate the publication of granular grid capacity information at both TSO and DSO levels, on a common platform (Articles 50 & 57)

• Require anticipatory investments based on consultations with the renewable electricity industry and in line with the national energy targets or planning exercises (Article 18) 

A renewables-based electrified economy requires a parallel deployment of clean flexibility tools by setting targets, designing dedicated support schemes and market products and more. 

• Conduct flexibility assessments for 10-year periods (Article 19c) 

• Require SOs to integrate demand response and storage targets in their grid planning (Article 19d)

• Do not allow derogations from the CO2 threshold of 550g/kWh for capacity mechanism. This would award an advantage to fossil fuels over clean flexibility (Article 64)