The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning
Abstract Purpose of Review On March 14, 2023, the European Commission (EC) published the much awaited “Proposal for a regulation (…) to improve the Union’s electricity market design.” The proposed regulation reflects the verdict of the EC after several mon...
| Main Authors: | , , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Springer International Publishing
2023
|
| Online Access: | https://hdl.handle.net/1721.1/152254 |
| _version_ | 1826204998944423936 |
|---|---|
| author | Batlle, Carlos Schittekatte, Tim Mastropietro, Paolo Rodilla, Pablo |
| author2 | MIT Energy Initiative |
| author_facet | MIT Energy Initiative Batlle, Carlos Schittekatte, Tim Mastropietro, Paolo Rodilla, Pablo |
| author_sort | Batlle, Carlos |
| collection | MIT |
| description | Abstract
Purpose of Review
On March 14, 2023, the European Commission (EC) published the much awaited “Proposal for a regulation (…) to improve the Union’s electricity market design.” The proposed regulation reflects the verdict of the EC after several months of fervent debate triggered by the energy crisis that has affected the European region. In this paper, we discuss several crucial elements that are part of the proposed regulation.
Recent Findings
In a nutshell, we deem the EC has done a great job managing a highly complicated situation. The proposal preserves the crucial role of short-term electricity markets and puts the focus on the key flaw: the perennial incompleteness of long-term power markets. The EC has put forward a large battery of measures, covering different dimensions and with very different potential impacts on the market design.
Summary
Here we focus on what we consider to be the four key elements of the proposal: (i) the promotion of long-term contracting, (ii) interventions during electricity price crises, (iii) the strategy for an efficient supplier risk management, and (iv) flexibility support schemes and capacity remuneration mechanisms. |
| first_indexed | 2024-09-23T13:05:09Z |
| format | Article |
| id | mit-1721.1/152254 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T13:05:09Z |
| publishDate | 2023 |
| publisher | Springer International Publishing |
| record_format | dspace |
| spelling | mit-1721.1/1522542024-01-10T19:57:13Z The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning Batlle, Carlos Schittekatte, Tim Mastropietro, Paolo Rodilla, Pablo MIT Energy Initiative Abstract Purpose of Review On March 14, 2023, the European Commission (EC) published the much awaited “Proposal for a regulation (…) to improve the Union’s electricity market design.” The proposed regulation reflects the verdict of the EC after several months of fervent debate triggered by the energy crisis that has affected the European region. In this paper, we discuss several crucial elements that are part of the proposed regulation. Recent Findings In a nutshell, we deem the EC has done a great job managing a highly complicated situation. The proposal preserves the crucial role of short-term electricity markets and puts the focus on the key flaw: the perennial incompleteness of long-term power markets. The EC has put forward a large battery of measures, covering different dimensions and with very different potential impacts on the market design. Summary Here we focus on what we consider to be the four key elements of the proposal: (i) the promotion of long-term contracting, (ii) interventions during electricity price crises, (iii) the strategy for an efficient supplier risk management, and (iv) flexibility support schemes and capacity remuneration mechanisms. 2023-09-22T18:59:17Z 2023-09-22T18:59:17Z 2023-08-02 2023-08-06T03:12:35Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/152254 Batlle, Carlos, Schittekatte, Tim, Mastropietro, Paolo and Rodilla, Pablo. 2023. "The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning." PUBLISHER_CC en https://doi.org/10.1007/s40518-023-00223-4 Creative Commons Attribution http://creativecommons.org/licenses/by/4.0/ The Author(s) application/pdf Springer International Publishing Springer International Publishing |
| spellingShingle | Batlle, Carlos Schittekatte, Tim Mastropietro, Paolo Rodilla, Pablo The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title | The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title_full | The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title_fullStr | The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title_full_unstemmed | The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title_short | The EU Commission’s Proposal for Improving the Electricity Market Design: Treading Water, but not Drowning |
| title_sort | eu commission s proposal for improving the electricity market design treading water but not drowning |
| url | https://hdl.handle.net/1721.1/152254 |
| work_keys_str_mv | AT batllecarlos theeucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT schittekattetim theeucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT mastropietropaolo theeucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT rodillapablo theeucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT batllecarlos eucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT schittekattetim eucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT mastropietropaolo eucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning AT rodillapablo eucommissionsproposalforimprovingtheelectricitymarketdesigntreadingwaterbutnotdrowning |