A future-proof EU electricity market: the role of R&I in taking up the challenge
The 2022 energy crisis has severely tested the EU electricity market. Record-high gas prices have directly impacted those of electricity, contributing to galloping inflation and rising energy poverty. The crisis has also raised concerns about the security of energy supply, all while the climate emergency continues to worsen at an alarming pace. As a result, there is ongoing questioning about whether the current design of the EU's electricity market is delivering at its best under the new circumstances.
The EU has already taken several short-term measures to tackle the energy crisis. In May 2022, the REPowerEU plan was launched to phase out Russian fossil fuel imports, diversify supplies, boost energy efficiency, reduce energy use, and speed up the clean energy transition. More specifically on electricity, a Council regulation of October 2022 on an emergency intervention to address high energy prices introduced electricity demand reduction targets and set a revenue cap on inframarginal electricity producers, i.e. those producing electricity below the cost of the most expensive 'marginal' fuel source.
In the eyes of the Commission and as sketched by President Von der Leyen in her 2022 State of the Union address, a more long-term structural electricity market reform should now be aimed at making the market more resilient, limiting excessive price volatility and ensuring energy supplies, especially from clean energy sources. A debate is also currently taking place about whether the current merit order system based on marginal pricing, effectively responsible for coupling electricity prices with gas prices, should be reformed. On 23 January 2023, the European Commission launched a public consultation on the reform of the European Union’s electricity market design and presented its legislative proposal on 14 March 2023.
Against this backdrop, clean energy research has a crucial role to play in ensuring that the future EU electricity market is well-suited to respond to the new economic, social and geopolitical context. A key contribution is, for example, expected in the development of new, and in some cases not even yet foreseen, clean energy technologies that would scale up the production, storage and distribution of low-carbon energies and thereby accelerate the transformation of the energy sector.
This SUPEERA webinar will therefore constitute a unique opportunity to explore the clean energy research contribution in tackling this most topical challenge and combine it with input from policy and industry – the “knowledge triangle” - with the view of shedding light on the way to design the EU electricity market of the future, optimally suited to provide a reliable, sustainable, affordable power supply.
