Last week, the European Commission presented the Electricity Market Reform Proposal, calling on European Union (EU) member states to include targets in their National Energy and Climate Plans for energy storage capacity and demand management.
The call argued that progress in these areas would enable greater integration of renewable energy into the electricity production system, while also protecting end-users from fluctuations in electricity prices.
The Commission’s work highlighted the current significant influence of natural gas prices in the formation of electricity prices in the electricity market. It emphasized that recent price fluctuations associated with natural gas prices have revealed a lack of demand-side management and energy storage solutions in the electricity market.
The text underlined that the shortage in these two areas would become even more pronounced as wind and solar power in EU countries increase.
Tariffs should be set to encourage demand management and storage
In the proposal, the Commission called on member states to take steps to ensure flexibility in the electricity market and to integrate more renewable energy into electricity grids.
These steps include regulating tariffs in a way that allows system operators to develop innovative solutions to optimize grids and encourages service procurement in these two areas.
The Commission also stated that relevant regulations in countries that apply capacity mechanisms should be updated to prioritize these two areas.
National targets should be set for storage and demand management
Another key call from the Commission was for EU member states to set national targets for energy storage and demand management in their National Energy and Climate Plans.
The text emphasized that these steps would make it possible to integrate more renewable energy investment into the EU’s electricity infrastructure, while also providing positive returns for electricity consumers.
According to the Commission, taking these steps will enable appropriate price signals to be given to the electricity market, making it easier to integrate energy storage facilities.
At the same time, the foundations can be laid to enable small-scale consumers to benefit from their flexibility potential.
The text also emphasized that controlling fluctuations in electricity prices could prevent end-users from facing increased electricity consumption costs.