The Electricity Market Design Revision Proposal

The Russian invasion of Ukraine has emphasised that relying on fossil fuels imports for the European Union’s energy system can have dramatic consequences on energy security and the economy at large. More than ever, energy independence, security of supply, sector integration, and decarbonisation are guiding policymakers’ actions.

Although decarbonising the energy sector is crucial, most system flexibility is currently provided by fossil gas: this has led to an insecure energy system and forced the European Union to depend on energy imports. The resulting price spikes and gas shortages have prompted quick action by European Union policymakers.

On March 14, 2023, the European Commission released a proposed reform of the Electricity Market Design, which, while somewhat limited in scope, has the potential to significantly impact the energy storage sector. EASE strongly supports this proposed revision, as it strikes a good balance between public involvement and market-based mechanisms and aims to maintain the current framework focused on day-ahead and intraday markets while introducing some changes. However, policymakers require guidance to make the most of this opportunity to change the electricity market framework.

To achieve the 2030 and 2050 climate and energy targets, the regulatory environment must be adjusted to ensure long-term investment signals and adequate deployment of flexibility and energy shifting capacity.

EASE outlines below its key position on how to enhance the proposal and make non-fossil flexibility a central component of the new decarbonised energy system.

This document is based on the previously published EASE position paper on the Electricity Market Design revision and the EASE reply to the European Commission’s public consultation.