Proposed reform is a band-aid for a failing electricity market

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(15 March 2023) The European Commission’s newly published draft proposal to reform the EU’s electricity market design delivers only superficial changes to the current electricity market design.
The proposal falls far short of a deeper reform that EPSU has been calling for since years and is nothing more than a band-aid applied to a failing electricity market. The Commission made clear that it is not willing to question the liberalisation dogma. The marginal pricing system will remain intact and the market as prone to crisis as always. The oversized redistribution from energy consumers to energy companies will continue.
The proposal does not consider how we can support households in reducing their energy bills in a fair and sustainable way to achieve a real right to energy. Instead, it speaks about “active participation of the consumers in the market and the development of their demand response.” A real solution would be to set up publicly owned energy providers with the mandate, and the capacity, to roll out energy efficiency improvements to homes, significantly reducing bills.
The proposal also fails to consider the shortage of workers in the electricity sector. In fact, the word “worker” does not appear once in the 72-page document. This shortage is caused to a significant degree by the impacts of energy liberalisation and is likely to create real bottlenecks for the energy transitions. There cannot be a transition without skilled workers.
One victory is that the longstanding demand by EPSU and the Right to Energy Coalition to ban disconnections was recognised. Article 28 of the proposed revised Directive states that “Member States shall ensure that vulnerable customers are protected from electricity disconnections.” It also foresees a role for regulated prices, though only for “energy poor and vulnerable households“ and SMEs and only in times of crisis.
The draft proposal will now be discussed in the Council of ministers and the European Parliament. They are expected to decide on their positions in the coming months. EPSU recently adopted its position on the reform during its Standing Committee on Utilities on 1 March.

Read our position on the electricity market reform proposal here also in BCS,  DE,  FR,  IT and  SV.