The European Union gave the green light Tuesday to key electricity and gas market reforms as well as a new regulatory framework to boost the development of hydrogen and other decarbonised gases. The adoption of the revised electricity market design and the decarbonised gas and hydrogen package are aimed at helping make the shift to renewable and low-carbon gases, in particular hydrogen, in the energy system, with a view to achieving the EU’s decarbonisation targets.

The updated gas market framework gives Member States the possibility to stop or limit imports of both piped gas and LNG from Russia and Belarus, in line with the REPowerEU objectives. The electricity market reform gives consumers a wider choice of contracts and clearer information before signing contracts. They will have the option to lock in secure, long-term prices as well as to have dynamic pricing contracts to take advantage of price variability to use electricity when it is cheaper.

Member States will have to establish suppliers of last resort so that no consumer ends up without electricity. Vulnerable consumers and the energy poor will be protected from disconnection and Member States will be able to extend regulated retail prices to households and SMEs in case of a crisis. On top of consumer protection, energy sharing is also strengthened. As an example, tenants will be able to share surplus rooftop solar power with a neighbour.

The reform is expected to help European businesses stay competitive by giving them access to more predictable energy costs. It creates the conditions for both suppliers and consumers to benefit from the expanded use of longer-term market instruments such as Power Purchase Agreements, two-way Contracts for Difference and forward contracts. This will provide investment certainty to both power producers and industrial consumers. Overall, both households and companies will be able to benefit from the lower costs of renewables, whose integration and availability will also be boosted by the new provisions on grid congestion, trading deadlines, demand response and storage, as well as EU-level auctions.

Finally, the Agency for the Cooperation of Energy Regulators (ACER) and national regulators will have enhanced ability to monitor energy market integrity and transparency. Following today’s adoption, the revised legislation will now be published in the Official Journal of the Union and its provisions will enter into force according to specific timelines.

Source: EUbusiness

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