EU electricity market reform: A new era for solar energy and sustainability

In a significant development for the European energy sector, EU politicians finalized an Agreement on December 14, 2023, to revise the electricity market, creating substantial opportunities for renewable energy sources.

SolarPower Europe highlights how the new framework provides a clear path for long-term investments in the solar sector, emphasizing the end of market limitations that fragmented the EU and hindered investments over the past year.

Measures Introduced by the Agreement for Renewable Energy, Businesses, and Citizens

The agreement introduces measures that benefit businesses and citizens. Besides encouraging companies to sign energy purchase agreements backed by state guarantees, it establishes, for the first time, the right of European citizens to share energy.

This provision allows them to be aware of the excess solar energy from neighboring countries and purchase it at lower costs within their communities, strengthening the energy grid and expanding access to solar energy.

The EMD, the new regulatory framework, includes provisions for easier grid connections and increased energy flexibility resources. Consumers can now request flexible grid connection contracts, improving the efficiency and sustainability of the energy system. These developments set Europe on the path to doubling its energy flexibility capacity by 2030.

Despite these advancements, challenges remain. Specifically, SolarPower Europe has expressed concerns about capacity remuneration mechanisms, which prolong Europe’s dependence on coal. The call is to shift towards clean and flexible energy solutions, such as batteries and active demand management, rather than fossil fuels.

The Agreement Recognizes the Right to Share Energy for the First Time

Further details of the agreement include the Council's decision to exclude the proposal to extend inframarginal market caps and the definition of EU criteria for energy emergency situations. Additionally, the right to share energy is recognized for the first time, providing a clear framework for all parties involved, including large industrial consumers.

This agreement promotes collective self-consumption and the creation of new business models in the solar sector, supporting the grid and expanding the potential of rooftop solar.

In conclusion, this agreement represents a significant step towards a more sustainable and flexible energy future for Europe, although some challenges remain, particularly regarding coal dependence and the integration of innovative and sustainable energy solutions.