EU customers should be able to have fixed electricity prices for a year

The European Commission argues, in a draft reform of the European Union (EU) electricity market, that European consumers should be able to sign contracts at fixed electricity prices for at least one year, advocating “greater contractual choice”.

“Member States shall ensure that end customers who have a smart meter installed can apply for a dynamic electricity price contract and that all end customers can apply for a fixed electricity price contract on a fixed basis. minimum duration of one year, with at least one supplier and with each supplier having more than 200,000 end customers”, defends Brussels.

The bet is part of a draft, accessed by Lusa, of the proposal on the redesign of the EU electricity market to be presented by the EU executive next Thursday, in which the foundation stresses that countries must “ensure that the national regulatory framework allows suppliers to offer fixed and dynamic electricity price contracts’.

After the energy crisis highlighted by the war in Ukraine and the current energy crisis, Brussels admits in the draft proposal (which may undergo changes until the final publication) that “the reflection of short-term prices in consumer bills has led to shocks prices”. , which has resulted in many consumers tripling or quadrupling their energy bills.

The proposal therefore includes a set of measures aimed at creating a buffer between short-term markets and electricity bills paid by consumers, in particular by encouraging long-term contracts, in order to improve the operation of short-term markets to better integrate of renewable energy sources and the strengthening of the role of flexibility and the empowerment and protection of consumers”, emphasizes the foundation.

The aim is to create “measures to protect consumers from such volatility, give them greater contractual choice and more immediate access to renewable energy,” he adds.

The European Commission admits that the intense energy crisis has revealed that, in the EU, “there are insufficient means to protect consumers, including companies, from high prices in the short term”, there is “an excessive effect of fossil fuel prices on electricity the prices and the fact that low-cost renewable and low-carbon energy are not better reflected in the bills’ and that there is still a ‘limited choice of supply contract types’.

The EU executive wants to reverse this situation by providing for “the right to fixed price contracts as well as dynamic price contracts, the right to multiple contracts and better and clearer contractual information”.

The European Commission will next week present its proposal to reform the design of the EU’s electricity market which aims to better protect consumers from excessive price volatility, facilitate their access to secure energy from clean sources and strengthen of market resilience.

In the current European market configuration, gas determines the global price of electricity when it is used, since all producers receive the same price for the same product — electricity — when it enters the grid.

In the EU, there has been consensus that this current marginal pricing model is the most efficient, but the acute energy crisis, exacerbated by the war in Ukraine, has sparked debate, given Europe’s dependence on Russian fossil fuels.

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