The European Commission has launched a public consultation on the reform of the EU’s electricity market.
The aim of the consultation, the commission said, is to better protect consumers from excessive price volatility; support access to secure energy from clean sources; and make the market more resilient.
According to the commission, the current electricity market system, while generally efficient, has some shortcomings.
These include the passing of the economic burden of price volatility on to consumers.
For that reason, the commission believes that reform is needed to better protect households and businesses from high energy prices.
The reform will also look to accelerate the transitions to clean energy as set out in the European Green Deal.
“It is crucial that all Europeans, from large industrial consumers to SMEs [small and medium enterprises] and households, benefit from the growth and low operational costs of renewables,” the commission said.
The consultation will inform a legislative proposal that the commission is aiming to deliver in the first quarter of this year.
The consultation, which will remain open until February 13, will focus on the following four areas:
- Making electricity bills less dependent on short-term fossil fuel prices and boosting deployment of renewables;
- Improving market functioning to ensure security of supply;
- Enhancing consumer protection and empowerment;
- Improving market transparency, surveillance, and integrity.
Commenting on the consultation and the coming legislative proposal, European Commissioner for Energy Kadri Simson said: “The EU’s electricity market has served us well for over 20 years.
“But the unprecedented energy crisis we are facing shows that we need to make the electricity market design fit for the future, allowing it to deliver the benefits of affordable clean energy to everyone.”
The commissioner added: “I look forward to the contributions from a wide variety of stakeholders, which will help guide our legislative proposal this year.”
Since the summer of 2021, energy prices have seen unprecedented spikes and volatility, and have had a “severe” impact on EU households and the wider economy.
Because of that, the European Council called on the commission to work on structural reform of the electricity market.
The planned reform of the electricity market design was announced by European Commission president Ursula von der Leyen last year and is included in the commission’s work programme for this year.