Electricity Market Reform & Permitting
Ahead of the key policy discussions taking place in Brussels, here are some of the relevant updates:
Electricity Market Design Reform
On 14 November, Mechthild Wörsdörfer (Deputy Director General at DG ENER, European Commission) presented to the European Parliament’s ITRE committee the Commission’s plans on the upcoming electricity market design reform.
You will kindly find below the key points from her intervention:
Content & Objectives
– Targeted reform aimed at decoupling the pricing mechanism of renewables and low carbon technologies from marginal technologies
– Ensure better functioning of short-term markets and efficient dispatch
– Improve REMIT to make markets more transparent
– Reduce market volatility and keep incentives for investments (also on grids)
– Mid-December: Commission to publish consultation document open for stakeholders’ feedback (TBD consultation period, usually is 4/8 weeks)
– 19 December: topic discussed at Energy Council
– February/March 2023: Commission’s proposal
– Given the time constraints, no full fledged impact assessment has been done
– Emphasis was given to the fact that many provisions of the Clean Energy Package – especially on flexibility – are still to be implemented
– Digitalization and decentralization of the energy system were mentioned as key topics, but it was not clear if and how they will be addressed in the reform
– When asked about the “Iberian exemption”, she said that while it reduced prices, the mechanism also triggered an increase in gas consumption
As previously announced, GEODE will work on this initiative through a dedicated Task Force currently being formed (please let us know if you would like to participate).
Permitting for Renewable Energy Projects
Additionally, on 14 November, the European Parliament’s ITRE committee voted on a report aimed to accelerate the deployment of renewable energy installations through easier permitting procedures.
Compared to the Commission’s proposal – presented with the REPowerEU plan last May and revising the Renewable Energy Directive (RED) – the Parliament’s text proposes to shorten the maximum period to approve new installations from 12 to 9 months, if located in the so-called “renewables acceleration areas”.
The new permit-granting process would cover all administrative steps to build, repower and operate plants for the production of renewable energy, including hybrid power plants. It would also cover storage, connection to the grid and the integration of renewables into heating and cooling networks.
The report will be put to a vote by the Parliament’s plenary during a forthcoming plenary session, and be further discussed with the Council as part of the ongoing trilogues negotiations on the Renewable Energy Directive (RED).
The file just voted is not to be confused with the new temporary emergency Council Regulation to accelerate permitting procedure proposed by the Commission on 9 November. The latter is expected to be approved during the next Extraordinary Energy Council on 24 November, and its provisions will act as a “bridge” until the permitting measures included in the ongoing revision of the Renewable Energy Directive will be implemented at national level.