The European Energy Exchange (EEX) has welcomed the Winter Package, published by the European Commission, which introduces proposals for legislation on the EU energy market and the development of renewable energy going forward.
“EEX believes that the European Commission is on the right track to provide a clear framework for achieving the completion of the EU Internal Energy Market. We see the package as a fundamental decision to instil trust in competitive and market based principles,” says Dr Tobias Paulun (pictured), chief strategy officer of EEX.
The legislation recognises that the creation of a well-functioning integrated electricity market relies on strong price signals and calls for a stop to regulated prices in all member states.
The commission is urging member states to enable the introduction of long-term hedging products to allow for more renewable energy in the power system and empower market players to hedge against price volatility risks. EEX is filling this gap through the development of innovative financial products such as wind power futures and cap futures, thereby contributing to make power markets work for consumers and businesses.
The commission also points out that uncoordinated national energy policies are not beneficial to the functioning of the internal energy market as they distort cross-border trade, causing higher costs for end-consumers. EEX agrees with the commission that the need to introduce capacity remuneration mechanisms has to be proved by standardised generation adequacy assessments to be performed across member states and executed on a provisional basis.
Paulun says: “Exchange market places have a central role in integrating the European market and building the Energy Union. EEX is committed to support the Energy Union in helping EU citizens to benefit from a truly integrated, flexible and clean EU power system. However, there is still room to further develop the proposal by the European Commission, for instance by giving functioning energy markets a bigger role in member state reports regarding the progress towards reaching the EU 2030 climate and energy targets.”
EEX also welcomes the target of maximising cross-border trading opportunities but is concerned that reducing the size of existing bidding zones is contrary to the target of an integrated market and neglects the significant value of the already existing power derivatives market as well as its needs for delivering new products and price signals.
The exchange encourages all stakeholders in the European Parliament and member states not to reduce the ambition of the Winter Package. EEX points out that, in order to further develop a vision for an integrated EU energy market, it is necessary to empower consumers and allow the EU to decarbonise its energy system based on market principles.
