The reform of the electricity market that the European Commission is studying continues to cause letters to be sent to Brussels. The latest letter brings together 10 of the most important energy associations in Europe to, among other things, ask the community representatives not to take into account proposals such as the Spanish one that put on the table greater interventionism in the market.
The signatories of this letter to which you have had access Vozpopuli are EER (European Energy retailers), NEMO Committee (Nominated Electricity Market Operators), EFET (European Federation of Energy Traders), Eurogas, Europex, EUTurbines, EUGINE (European Engine Power Plants), Solar Power Europe, WindEurope, Eurelectric.
His recommendation is that the legislative proposal prepared by the European Commission for this month preserve the benefits of the internal market. “Short-term marginal markets provide the right signals for dispatch and investment in non-issuing assets”, explain the signatories. Although these employers, who represent the bulk of the energy sector in Europe, want a reform to come out of Brussels that offers “regulatory stability” so that they do not have to look at other markets such as the United States.
“Investor confidence in the regulatory framework must be strengthened to attract investment. Market interventions must be limited in time. We are against institutionalizing interventions of an exceptional nature such as the reduction of income or the establishment of regulated prices or regulated income”, details the letter with a clear reference to Ribera’s proposal.
His proposal includes improved coverage for electricity consumers. They also bet that households and industry have greater opportunities for short and long-term coverage. The sector considers that fixing the products that suppliers have to offer should be avoided. “It is the market that has to offer different products”, they qualify.
An alternative to Ribera
Ribera seeks, on the other hand, with his measure a futures market that achieves the stability that current futures markets do not offer. His plan consists, through auctions, of contracts for differences with renewable generators, which will receive a fixed price throughout the useful life of the facilities, in a similar way to the system applied in Spain. “Consequently, heRenewable generation will reflect the average costs of the facilities, guaranteeing their profitability and transferring the discount to consumers”, explains Spain in its proposal.
The Spanish Government exposes Brussels that, for those non-contestable technologies, in which there is hardly any competition, due to scarcity of resources or lack of social and political support, such as hydroelectric and nuclear, the contract for differences will materialize at a regulated price. “This could reduce consumer prices immediately, while offering security, visibility and income stability to generators, without making extraordinary profits”, exposes the Spanish plan.
Improving the investment climate
The 10 signatory associations of the last letter ask that the value of the market be recognized, that consumers have the possibility of contracting both in the short and long term with sufficient possibilities. In this sense, stress that the reform should improve the investment climate in Europe.
With regard to the regulatory proposal that the European Commission will present, it recommends: preserving the benefits of the internal market, ensuring regulatory stability, improved coverage for consumers, promoting forward contracting, developing flexibility and demand management and, lastly, promoting investment in networks.
They ask that you promote forward contracting with forward markets, PPAs and CfDs contribute to this goal. For the sector, the CfDs proposed by Ribera must be complementary and not mandatory. Lastly, they ask that demand management be developed and that investment in networks be promoted.
