On 27 March, MEPs in the European Parliament in Strasbourg approved in a vote the last files of the Clean Energy Package (CEP) on the Electricity Market Design Directive and Regulation. A final approval was also voted for the Agency for the Cooperation of Energy Regulators (ACER Regulation) and Risk-Preparedness for the electricity sectors. All files were voted with a large majority.

After the adoption of the 2030 climate legislation and the commitments to meet the Paris Agreement commitments, the CEP is one of the largest Commission files to be finalized and approved this year towards a steady path to decarbonize our economy. Last year on 18 December, EU negotiators reached a common agreement on the two last remaining files of the CEP, which was published by the European Commission in Winter 2016. CEEP welcomes the progress that has been made for the two electricity files compared to the initial proposal of the Commission and overall welcomes the Parliament’s final approval this week to approve the new set of market design rules for the European energy market. Miguel Arias Cañete, European Commissioner for Climate Action and Energy, stated that “This package brings the completion of the Energy Union closer. The energy market will be more secure, more sustainable and more competitive”.

CEEP pleaded for a functioning European internal energy market and welcomes overall that consumers and CO2 emission reduction are placed at the heart to achieve the EU’s climate and energy objectives in the short and long term, whilst creating a fair and level-playing field for all market actors and ensuring a well-balanced competitive energy market. For that CEEP welcomes the new roles and responsibilities that have been put in place to ensure that there are no further market distortions and non-discriminatory treatment privileging certain actors. To ensure and safeguard a functioning EU energy market, CEEP also pleaded for  recognition that system adequacy is vital to the European electricity system and that capacity mechanisms are a tool to guarantee that enough capacity will always be available, especially at peak periods to supply demand. For that, new rules have been put in place setting conditions for Member States to ensure a sufficient supply of electricity during peak times.

Furthermore, CEEP welcomed in general the Commission’s efforts to find effective tools to reduce emissions in the electricity sector; However, respecting the emission limit of 550 gr CO2 of fossil fuels per KWh of electricity will be challenging for some Member States. The Regulation will exclude new power plants emitting more than the limit mentioned above from the capacity mechanisms and existing power plants that produce on average 350kg CO2 per year per installed kW may continue until 1 July 2025 in the capacity mechanism. With regard to the establishment of the EU DSO entity, CEEP supported this concept in principle and welcomes that DSOs regardless of their size are allowed to become a member in this entity and are included in the process to design the Network Codes. Also, it is positive to see that DSOs can act in their roles as active neutral market facilitators, by managing procurement of flexibility through the support of given incentives and establishing network tariffs and exercising data management.

For the publication into the Official Journal of the Union, the two electricity files will have to be formally approved by the Council of Ministries of the EU before the Regulation file can enter into force on 1 January 2020. The Directive will have to be transposed into national law within 18 months. The Regulation for Risk-Preparedness and ACER will enter into force right after their publication.

If you have any more questions on the Clean Energy Package please contact our Policy Officer Henriette Gleau (henriette.gleau@ceep.eu).

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