Public Consultation on the Energy Market Design - Orgalime Response
Published: 8 October 2015
Policies & Issues: Energy & Climate
Orgalime welcomes the Commission´s commitment to redesign the EU electricity market to provide a New Deal For Consumers and to transform the EU energy system by taking full advantage of available and future innovative low carbon and energy efficiency technologies and services.
A more modern, competitive and flexible set of arrangements to govern the generation, transmission, distribution and end use of electricity, including the use of electricity infrastructure, is needed for bringing the benefits of the Energy Union and 2030 Energy and Climate Framework, to consumers, businesses, industry and society as a whole. We consider a properly redesigned electricity market as a milestone for the realisation of the Commission´s headline priority of 'a forward looking, resilient EU Climate and Energy Policy' as well as further headline priorities, namely the Digital, Jobs and Growth and Circular Economy initiatives.
As such, we believe that the future energy market design requires a holistic approach, which includes all levels of the energy value chain starting with giving special attention to demand efficiency and all sources of flexibility to close the current regulatory and innovation gap at distribution level. The new market should be much more market driven and competitive, where price peaks function as investment signals rewarding flexible, clean and 'fast delivery' technology solutions. We support an evolution of the Energy Efficiency Directive to close current gaps at end use, distribution and smart grid level and an evolution of the Energy Performance of Buildings Directive towards 'connected buildings' to carry forward the energy efficiency successes of the existing Ecodesign Directive to the different systems levels. The existing barrier of inappropriate criteria of the TEN-E Regulation for smart grids projects should be removed.
We support that better linking wholesale and retail market should be a priority, though not only in terms of a 'top down' approach so as to bring more convergence between wholesale and retail prices, but first and foremost as a 'bottom up' approach through full consumer empowerment. We promote the free flow of electricity in the EU internal market as a fifth freedom for Europe. Consumers need to be able to achieve better control over their energy costs, consumption and overall management through the combination of decentralised energy generation energy management systems and smart appliances.
Support schemes for electricity generation from Renewable Energy sources should be more market oriented and coordinated:
Energy efficiency technologies, Demand Response services, all different sources of flexibility and smart grids are 'no regret options' to make costs of renewables sustainable. We are convinced that the realisation of the new 2030 climate and energy targets and EU world leadership in Renewable Energy Technologies cannot be achieved without a thorough implementation of the 'Energy Efficiency First' principle throughout all market segments. In addition, designing the new energy market together with the Digital Agenda matters to build in the reality of the ongoing rapid change that the use of ever more digital technologies in industry, including the energy and manufacturing sectors, brings.
A robust, predictable and growing carbon price is necessary coupled with instruments, which are not overlapping but coherent at European level.
Regarding capacity mechanisms, Orgalime asks that progress should be made on the assessment of the adequacy of the power system. Common methods and a common European approach are necessary. The strong focus on generation capacity in the context of the generation adequacy debate requires balancing – the different options of ensuring capacity should be able to compete at equal level. Virtual power plants and demand aggregation should be fostered for the benefit of end user participation in demand response that should be on equal footing with generation, including in intraday markets. If properly designed, the necessity of capacity mechanisms should diminish.
In the subsequent chapters, Orgalime presents its responses to:
- the public consultation on the New Energy Market Design
- the public consultation on Risk Preparedness in the area of Security of Electricity Supply, and
- the Communication on 'A New Deal for Energy Consumers'.
Director - Energy, Climate & Environment