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Seven EU Countries Oppose 'Radical' Changes To The Energy Market

A group of seven EU member states is calling on the European Commission to think twice before proposing a major overhaul in the EU energy and power market systems, citing concerns that “crisis mode” changes could weaken the single market and deter investments in renewables.   

“Any reform going beyond targeted adjustments to the existing framework should be underpinned by an in-depth impact assessment and should not be adopted in crisis mode,” Denmark, Germany, the Netherlands, Estonia, Finland, Luxembourg, and Latvia wrote in a letter to the European Commission seen by Reuters.

Last month, the European Commission launched a public consultation on the reform of the EU’s electricity market design with the aim “to better protect consumers from excessive price volatility, support their access to secure energy from clean sources, and make the market more resilient.”

The seven EU member states opposing “crisis mode” legislation for the long term argue that the system and the EU market need to continue to incentivize investment in renewables, which the bloc considers crucial for reducing dependence on imported fossil fuels and their impact on energy bills.

The idea of extending a temporary windfall tax on non-gas generators could undermine investments in renewables, the countries said.

Electricity industry group Eurelectric has also voiced concerns over rushed crisis interventions that could have long-term implications on the EU market.

“Radical design changes in the midst of a crisis would be detrimental in the long run. Potentially for security of supply, and most definitely for investor confidence. A poorly designed reform could cause a multi-year slump at a time where investments are needed more than ever. Therefore, we suggest to make targeted additions to the current market design,” Eurelectric said in December in a letter to the European Council on energy supply and prices in Europe.

“It is of paramount importance to distinguish between emergency measures and a structural reform of the market,” the group said.

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By Tsvetana Paraskova for Oilprice.com

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  • DoRight Deikins on February 13 2023 said:
    Well, yes. Everyone is well aware that government bureaucrats and politicos understand the workings of the economy and energy production far better than those so-called corporate experts, who are only out to satisfy the needs of society so they can make a fast buck. We have clearly seen over the past 100 years how state controlled economies have made the world a better place.

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