The EU plans reforms to protect electricity bills from fluctuating fossil fuel prices. Photo by Sunshine Studio Shutterstock.com

The EU proposes to reform its electricity market to protect consumer bills from fluctuating fossil fuel prices

The European Union has announced a proposal that aims to make changes to its electricity market by protecting its consumers from paying high energy bills, affected by the prices of fossil fuels.

The proposed reforms are aimed at protecting its energy market from a repeat of last year, when energy prices in the EU hit record highs after Russia cut its gas supplies.

This shortage caused consumers to face ever-increasing electricity bills, so several industries also faced block-wide shutdowns.

“We need to make the electricity market design future-proof, allowing it to deliver the benefits of affordable clean energy to all,” said Kadri Simson, EU energy commissioner, quoted by Reuters.

To make these changes, the commission has presented several options for changing the way power plants sell electricity.

The commission said this will be part of the market reform the commission plans to propose in March of this year.

“The EU proposal will aim to expand Europe’s use of long-term contracts that provide power plants with a fixed price for their electricity contracts for difference (CfDs) and power purchase agreements (PPAs),” it said. a communiqué from the commission.

“The expansion of these types of contracts would create a buffer between energy consumers and volatile prices in energy markets in the short term, leading to more stable energy bills for households and businesses,” he added.

The commission continued: “Stability for consumers could be achieved by introducing specific EU rules for CfDs and letting national governments decide to use them, or by requiring new state-supported power plants to sign CfDs.”

Meanwhile, countries like France and Spain have already announced an expansion of CfDs, which are aimed at nuclear and renewable generators.

EU countries, as well as their legislators, will now negotiate final energy market reforms to be implemented across the bloc in the future.


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