EMD - Electricity Market Design reform

The Electricity Market Design (EMD) reform aims to reduce price dependence on volatile fossil fuel prices and accelerate the deployment of renewable energy sources (RES). As a multi-sector organisation, BSP has actively participated in the EU debate, highlighting the impact of EMD regulation on various industries, particularly fertilisers and transport. We stressed the need to take nuclear energy into account, to increase the flexibility of the electricity system, to permanently integrate the capacity market into the EU market architecture, to extend the derogation for entities participating in the capacity market to the emission limit of 550 g CO2/kWh, to maintain technological neutrality and the possibility of using differential contracts.

Objectives and Assumptions of the Reform

1. Reducing Dependence on Fossil Fuels:
   • The reform aims to reduce the dependence of electricity prices on volatile fossil fuel prices by promoting long-term contracts and improving the functioning of short-term markets.
2. Increase in the use of RES:
   • The changes are intended to accelerate the growth of the use of renewable energy sources, which is crucial to achieving the European Union's climate and energy goals.
3. Price Stabilization:
   • The reform aims to achieve stable electricity prices, which is beneficial for both consumers and industry.

Proposed Changes

• Increasing the Share of Long-Term Contracts:
  • The planned changes include increasing the role of long-term contracts in shaping electricity prices.
• Improving the Functioning of Short-Term Markets:
  • The reform aims to improve the efficiency and transparency of short-term markets.
• Increasing the Flexibility of the Power System:
  • We pointed out the need to increase the flexibility of the electricity system, which is crucial for the integration of more RES.
• Maintenance and Development of the Power Market:
  • The reform implies the permanent integration of the capacity market into the EU market architecture and the extension of the derogation for capacity market entities from the emission limit of 550 g CO2/kWh.
• Technological Neutrality:
  • The reform promotes technological neutrality by allowing the use of different technologies, including differential contracts, which aims to support innovative energy solutions.

Activities and Positions of BSP

The BSP submitted its position on the electricity market structure and the integrity and transparency of the wholesale energy market to the European Commission and the European Parliament. A debate on “Energy effective solutions for the EU — let's talk about Electricity Market Design Reform” was also organised with the participation of key energy institutions and companies.

Sample Documents and Analyses

• Position of BSP: Concerning the structure of the electricity market and the transparency of the wholesale energy market.
• Legislative Analysis: Including the reform of the electricity market and the proposed changes.
• ACER documents: Analyses of the publications of the Agency for the Cooperation of Energy Regulators.

The reform of the electricity market is an important step towards a sustainable and stable energy future for Europe. BSP will continue to actively participate in the legislative process, supporting solutions that benefit the entire energy sector.

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