On July 19, the European Parliament passed the EU power market design reform plan with 55 votes in favor and 15 votes against.
Members of the European Parliament (MEP) have welcomed the wider use of contracts for difference (CfD) mechanisms to accelerate the development of renewable energy, with a vote by the European Parliament's Energy Committee.
Under the CfD, public bodies will compensate energy producers if energy prices fall sharply and charge energy producers if prices are too high.
MEP Nicolás González Casares said: "We have turned the CfD into a reference system to encourage the transition of the electricity sector to a zero-emission renewable energy system. Through clean electricity and stable prices, this system will increase the competitiveness of companies. "
MEPs also asked the European Commission to create a market for power purchase agreements by the end of 2024, highlighting that this is a mechanism that provides stable prices for consumers and reliable income for renewable energy suppliers.
The reforms were proposed by the European Commission earlier this year. The industry, research and energy committee of the EU legislature held a vote with 55 MEPs in favour, 15 against and two abstentions.
The committee also voted 47 to 20, with 5 abstentions, to start negotiations with the European Council on design reforms, but that step would still need to be voted on by the full House of Representatives at an upcoming plenary session.
Another proposal from the European Commission earlier this year would allow consumers with rooftop solar installations to sell excess solar power to neighbors, rather than just suppliers, which would present another potential revenue stream.
Naomi Chevillard, head of regulatory affairs at trade body SolarPower Europe, said: "Members of the European Parliament decided not to introduce market revenue caps as a structural feature of the electricity market, so today we are relieved. They have recognized the enormous negative effect of caps on renewable energy growth. Impact. The PPA market shrinks by 21% in 2022 due to regulatory uncertainty.”
"The vote sends a strong signal to EU capitals as the Energy Council struggles to agree on its own position. The EU institutions must now conclude negotiations to ensure the speedy passage of the text, which contains a call for the PPA , rooftop photovoltaic and solar energy grid-connected development."
Finally, reforms could also improve the transparency of available grid-connected capacity while bringing deal deadlines closer to real-time, allowing for better distribution of renewable energy deals and balancing flows.