The reform adopted last week will make the EU electricity market more stable, affordable, and sustainable.
The measures, composed of a regulation and a directive already agreed upon with the Council, aim to protect consumers against volatile prices. MEPs ensured that they would have the right to access fixed-price contracts or dynamic-price contracts and receive important information on the options they signed up for. Suppliers will not be allowed to unilaterally change the terms of a contract.
MEPs also ensured that EU countries can prohibit suppliers from cutting the electricity supply of vulnerable customers, including during disputes between suppliers and customers.
The legislation provides for so-called “Contracts for Difference” (CfDs), or equivalent schemes with the same effects, to encourage energy investment. In a CfD, a public authority compensates the energy producer if market prices fall too steeply, but it collects payments from them if prices are too high. The use of CfDs will be allowed in all investments in new electricity production, whether from renewable or nuclear energy.
The text sets out a mechanism to declare an electricity price crisis. In a situation of very high prices and under certain conditions, the EU may declare a regional or EU-wide electricity price crisis, allowing member states to take temporary measures to set electricity prices for SMEs and energy-intensive industrial consumers.
