The EU says that the changes provide further tools to reach its energy and climate targets under the European Green Deal. The updated gas market framework gives member states the possibility to stop or limit imports of both piped gas and LNG from Russia and Belarus, in line with the REPowerEU objectives.

Better protected and more competitive power consumers
The electricity market reform gives consumers a wider choice of contracts and clearer information before signing contracts. They will have the option to commit to long-term prices as well as dynamic pricing contracts to take advantage of price variability to use electricity when it is cheaper. Member states will have to establish ‘suppliers of last resort’ so that no consumer ends up without electricity. Vulnerable consumers and the energy poor will be protected from disconnection, and member states will be able to extend regulated retail prices to households and SMEs (small and medium enterprises) in case of a crisis.

On top of consumer protection, energy sharing is also strengthened. As an example, tenants will be able to share surplus rooftop solar power with a neighbour.

The reforms will also help European businesses stay competitive by giving them access to more predictable energy costs. It creates the conditions for both suppliers and consumers to benefit from the expanded use of longer-term market instruments such as power purchase agreements (PPAs), two-way contracts for difference (CfD) and forward contracts.

The integration and availability of renewables will also be boosted by the new provisions on grid congestion, trading deadlines, demand response and storage, as well as EU-level auctions.

Finally, the Agency for the Cooperation of Energy Regulators (ACER) and national regulators will have enhanced ability to monitor energy market integrity and transparency.

Changes to the European gas market
Meanwhile, the new framework for the gas market aims to facilitate the uptake of renewable and low-carbon gases while ensuring security and affordability of energy for all European citizens. In particular, the reforms are expected to facilitate the creation of a market for hydrogen, which will be key to curb emissions in hard-to-abate sectors such as heavy industries and transport.

The European Commission will also pilot a five-year project to bring together demand and supply of hydrogen to enhance market development and transparency under the European Hydrogen Bank.

Consumers will be able to switch suppliers more easily; use effective price comparison tools; get accurate, fair and transparent billing information; and have better access to data and new smart technologies.

‘The energy crisis brought about major changes to the EU’s energy landscape. Once largely dependent on Russian supplies, Europe is now moving on to the electricity and gas markets of the future, where there is no space for Russian gas and where renewables, clean gases and hydrogen have a central role,’ comments Kadri Simson, Commissioner for Energy. ‘I particularly encourage all member states to make use of the new REPowerEU provisions to end Putin’s access to our energy markets as soon as possible.’

Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight, adds: ‘Stable prices and clean energy are key for our citizens to live a better life and for our businesses to prosper in Europe while competing fairly on the global market. Under this updated framework, European households and businesses will benefit from more security, affordability and transparency on the European energy markets. This is good for the clean energy transition and this is good for the economy.’

Click on these links to find out more on the reform of the electricity market design and the decarbonised gases and hydrogen package.