Flexible Energy Markets for Europe

Press Release, German Renewable Energy Federation. Berlin.  „The European Commission has, rightly, recognised that the existing energy markets in Europe still have to be made fit for more renewable energies”, Dr. Herrmann Falk, managing director of the German Renewable Energy Federation (BEE), comments.  In transforming the energy system the European Commission is setting out for a secure supply based on renewable energies.

 In the communication published July, 15 for public consultation the Commission has outlined first approaches and raised new questions regarding the best way to a successful market transformation. Aiming for a further reduction of market distortions and for an increase of flexibility in the market the Commission is on the right track, Falk says. This is also what the BEE response to the EU market design consultation states.The most important steps for integrating renewable energies into the market are the creation of fair competition and of the necessary flexibility. “The Commission emphasizes that the existing structures of the electricity production as well as of the electricity consumption are not flexible enough to cope with an increasing share of renewable energies.” Moreover, the design of balancing markets will be essential. Here, “Member States’ efforts should be oriented towards the most advanced markets” according to Falk. In addition to that, these markets still have to be optimized.

Furthermore, it would be important that “market prices speak the truth”. On the one hand the Commission calls for that, but then gets in her own way by her own State Aid Guidelines. The latter inter alia rule that renewable energies shall no longer be remunerated in the case of negative prices. Falk: “Scarcity prices are needed.” In a self-regulating system capacity remuneration markets, which are viewed critically also by the Commission, consequently would not be necessary. Further developed markets can provide for a secure energy supply.

In total, the new market design provides the Commission and Member States with the opportunity to reduce barriers, which hinder the full implementation of the Internal Energy Market and the development of renewable energies, and, thus, to promote flexibility, integration and regional cooperation.

Download: Future-Oriented Market Design

Source: PRESS RELEASE German Renewable Energy Federation BEE e.V., 8th October, 2015

compare to: Energy Union address shows Commission ready to step in on EU renewables target