Legislators sign off on major reform of EU electricity market

In December 2018, EU legislators agreed to adopt new electricity market rules to better integrate renewable energy, to help consumers switching energy providers and to end state subsidies to the most polluting coal power plants.

The adopted rules will make it easier to support efforts to reach the EU’s binding goal of 32% renewables by 2030. In addition, it strives to make the EU’s electricity market more competitive and consumer-oriented. Consumers are expected to benefit substantially from the new rules. According to the amendments, electricity providers must offer consumers the option to switch provider, and they will have the right to get smart meters to control their consumption. In addition, consumers will have access free-of-charge to an online price comparison tool and they will also be able to opt for a dynamic electricity price contract from energy companies with more than 200,000 clients.

State subsidies to the most polluting coal power plants will be abolished. EU rules currently allow national authorities to pay conventional power plants to be on stand-by, for a limited period of time, if there is a demand peak or temporary shortage of renewable energy (capacity mechanisms). As to the energy poverty and price regulation, Member States will be able to regulate prices temporarily to assist and protect energy-poor or vulnerable households.

EU Member States that still regulate household prices may continue to do so but they must submit reports to assess the progress towards abolishing price regulation. Member States will have to implement the Directive by 31 December 2020, assuming that it is approved by the European Parliament and the Council.

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