Energy co-op sector welcomes reform to EU’s energy market

But sector body REScoop warns a level playing field must be ensured now that energy sharing is open to bigger players in the market

Renewable energy co-ops welcomed the adoption of new electricity market rules by the European Council on 21 May.

The reform introduces energy sharing as a distinct activity, calling on member states to put in place policy and regulatory frameworks.

Under the new rules, regulators must monitor and remove unjustified obstacles and restrictions for energy sharing and renewable and citizen energy communities. Member states and EU institutions must also take steps to help smaller market actors sell renewable energy sources production via power purchase agreements, including by setting up guarantee schemes.

“Today marks an EU milestone towards a carbon-free and greener future for all” said Belgian energy minister Tinne Van der Straeten. “With the adoption of the electricity market reform, we are empowering consumers, ensuring the security of supply, and paving the way for a more stable, predictable and sustainable energy market.”

The new rules enable member states to use two-way contracts for difference (CfDs), or equivalent schemes with the same effects to support new investments in electricity generation and make sure electricity prices are less affected by the price volatility of fossil fuel-based markets. CfDs can apply to investments in new power-generating facilities based on wind energy, solar energy, geothermal energy, hydropower without reservoir and nuclear energy.

The regulation also requires electricity suppliers to have hedging strategies in place and member states to put in place enabling conditions so energy communities can access hedging products.

REScoop, the European federation of citizen energy co-operatives, thinks the new rules could bring both opportunities and risks for energy communities.

The federation welcomed the introduction of “a more elaborate and clear concept of energy sharing” and that of new concrete rules requiring grid operators to operationalise this concept. 

But it warns that energy sharing is now open to all market actors, which means that energy communities will face stiff competition for grid space from well-resourced energy companies.

“Moving forward, it is essential that regulations and rules around energy sharing ensure a level playing field so that energy communities can flourish using this new activity,” said a REScoop pressperson.

The new rules will become directly applicable in all EU member states.