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New rules for Europe’s electricity market

Cheap generating costs and greater protection against price volatility – for consumers, these are the two key points of the European electricity market reform which the EU ministers agreed on in Luxembourg in mid-October.

The rules stipulated by the EU’s Energy Council on the EU’s electricity market aim to learn the lessons from the energy crisis. The focus is on protecting consumers from volatile electricity prices and on the cost reductions resulting from cheaper renewables-based electricity.

Federal Minister Robert Habeck said: “Today, Europe demonstrated its ability to act. The agreement improves access of consumers and industry to less expensive electricity throughout Europe. The crisis year of 2022 has shown that the European electricity market basically works well. In spite of the huge problems, we jointly succeeded in securing our electricity supply during one of the biggest electricity crises in the history of Europe. The new electricity market design will further strengthen the electricity system.”

Germany advocated successfully for fair European electricity market rules
During the negotiations, Germany successfully advocated in particular a level playing field on the European electricity market. Rules which apply to all the Member States can now create a level playing field. This includes the agreement on contracts for difference (electricity contracts between generators and the state stipulating one or several fixed electricity prices).

The relevant measures and criteria are to be reviewed by the European Commission in future. The package of directives and regulations will now be negotiated in a trilogue with the European Parliament before being finally adopted.