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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.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.