Brussels, Belgium– The European Union reached an agreement on Thursday to reform the bloc’s electricity market in a bid to reduce dependence on fossil fuels and stabilize consumer prices, the EU Council said in a statement.
“Today, the Council and the Parliament reached a provisional agreement to reform the EU’s electricity market design (EMD),” said a statement released by the presidency of the Council of the EU, currently held by Spain.
“The reform aims to make electricity prices less dependent on volatile fossil fuel prices, shield consumers from price spikes, accelerate the deployment of renewable energies and improve consumer protection.”
The EU’s plans are aimed at making the market less vulnerable to volatility and were seen as a response to Russia’s invasion of Ukraine, which sent energy prices spiraling for consumers and businesses last year.
“This deal is great news, as it will help us reduce even more the EU’s dependence on Russian gas and boost fossil-free energy to cut greenhouse gas emissions,” said Teresa Ribera, Spain’s energy minister.
The deal will have to be endorsed and adopted by both the Council and the Parliament.
Part of wider reforms, the deal also includes a regulation that will improve the EU’s protection against market manipulation through enhanced monitoring and transparency, also known as REMIT.
The 27 member states reached a provisional agreement on REMIT on November 16.
Thursday’s agreement will see states given the “possibility to exclusively support” the acquisition of new renewable generation, in line with member countries’ decarbonization plans, said the statement.
The deal also empowers the Council, which represents member states, to declare a union-wide “crisis” based on market conditions.
This could be “related to the average wholesale electricity price or a sharp increase in electricity retail prices”, according to the statement.
The deal will see the tightening of measures to “protect vulnerable and energy poor customers”, it added.