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Enhancing the EU’s Electricity Market: MEPs Support Sustainable Measures
In their amendments to the draft legislation, MEPs from the committee supported sustainable proposals to strengthen the stability, affordability, and sustainability of the EU’s electricity market. However, the idea of capping the revenues of generators during energy price surges did not garner their backing.
Lead Negotiator’s Proposal for Electricity Market Stability
Earlier, Nicolas Gonzalez Casares, the European Parliament’s lead negotiator on the electricity market reform, proposed a cap on the extraordinary profits made by power-generating companies during energy price spikes. The proposed cap would have aimed to recover 90% of any revenue above $202 (180 euros) per megawatt-hour (MWh) and applied to producers from various sources, including wind, solar, nuclear power, and coal.
Power Industry’s Strong Opposition
Despite the proposal, the energy committee of the European Parliament did not support the revenue cap idea. The electricity industry was strongly opposed to it.
Relief in the Market
Following the committee’s decision, Naomi Chevillard, Head of Regulatory Affairs at SolarPower Europe, expressed relief. She highlighted the potential negative impact of caps on renewable energy growth, which led to a 21% contraction in the Power Purchase Agreements (PPA) market in 2022 due to regulatory uncertainty.
Broad Agreement on Electricity Market Reform
Earlier this month, the European Parliament reached a broad agreement on the proposed electricity market reform to prevent energy crises and improve overall stability.
Next Steps for the Market Reform
The proposal now moves to the Council and the European Parliament for further debate and negotiation. The market reform will undergo a final vote later this year, and the European Parliament is set to vote in September. Subsequently, there will be final negotiations with EU member states in the autumn.
Conclusion: Focusing on Sustainable Measures for the Power Market
While the revenue cap proposal did not receive support, the focus remains on sustainable measures to ensure the stability, affordability, and sustainability of the EU’s electricity market.
FAQs on the Electricity Market Reform
Why was the revenue cap proposal rejected in the electricity market reform?
The revenue cap proposal was rejected due to opposition from the electricity industry and concerns about its negative impact on renewable energy growth.
What was the main objective of the electricity market reform proposal?
The main objective of the market reform proposal was to prevent energy crises and ensure a stable, affordable, and sustainable electricity market.
Who proposed the revenue cap idea for electricity generators?
Nicolas Gonzalez Cazares, the European Parliament’s lead negotiator on the market reform proposed the revenue cap idea.
Which producers would the revenue cap have affected?
The revenue cap would have affected producers using wind, solar, nuclear power, and coal.
What are the next steps for the market reform proposal?
The proposal will undergo further debate and negotiation in the Council and the European Parliament. The final vote is expected later this year, followed by negotiations with EU member states in the autumn.
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