June 6th, Members of the European Parliament and key representatives from industries across the energy system met with Director of Energy Policy from the European Commission. On the agenda was one of the key challenges of this time in the transformation towards a low-carbon economy: The interplay between market design and variable renewable energy sources.
Energy Solutions gathered key decision-makers to take stock on the review of legislative acts – and at a crucial point in time with an expected estimated half year only left before the wrap up of important proposals in the delivery of legislation for a future Energy Union.
Director of Energy Policy at the European Commission, Mrs. Megan Richards emphasised the importance of the participation of all actors for the successful implementation of policy proposals in advancing the energy transition – an energy transition that is already happening with dramatic changes and even more dramatic pace within the energy market:
“The regulatory framework should keep up to date with the market, technology and developments – that always moves faster than the regulatory framework”, said Mrs. Richards elaborating on key dimensions of that regulatory framework in the intersection between renewable energy, electricity market design, and consumers:
- The renewable directive should establish a regulatory framework for renewables to prosper – and the EU is determined to become first in renewables, including maximizing the use of renewable energy in buildings, transport and industry
- The electricity market design must adapt to a higher level of renewables, making the market fit for more renewables – and the market is already demonstrating increasing components of renewables of renewables, but we can do even more
- The regulatory framework should make sure to empower and protect consumers in the energy transition
Vice President to Energy Solutions and Member of the European Parliament (S&D), Mr. Poche (S&D) echoed the need for full attention in undergoing the transition towards a low-carbon economy:
“We need to find the best solutions on how to get variable renewable sources into the energy system while addressing the market design – and the challenge is clear: The existing electricity market is out of balance and on top of that the future market design is not fully adapted to increase the participation of renewables. We must take effective steps towards rebalancing the electricity market and accommodate new trends that will shape the future energy system – the solutions are more”, said Mr. Poche, elaborating:
- Deeper integration of the electricity system, including electricity from renewables
- Storage to make the system work smoothly
- Affordability of energy for consumers
Industry representatives highlighted integrated energy solutions that can facilitate the interplay between the market design and variable renewable energy:
DONG Energy Head of European Affairs, Mr. Vessia illustrated the transition of the energy market as a shift from repetitive waltz to a modern interactive dance – a dance between supply and demand where price signals are the music that coordinates supply and demand options for a flexible electricity system. A successful modern dance requires market actors to listen to the most recent signals, and not rely on day-ahead “beats” – i.e. move trading closer to physical delivery.
Schneider Electric CEO for Germany, Mrs. Frei-Spreiter emphasized that prosumers, especially commercial and industrial ones, must have the right legal, technical and financial framework to proactively engage in the future energy market.
Danfoss Head of European Affairs, Mrs. Chambris underlined that the acceleration of the digitalization of the building stock via automation and controls in the Energy Performance of Buildings Directive (EPBD) is a prerequisite for the integration of buildings in the wider energy system. She also highlighted that sector coupling will be key for a successful energy transition, implying that the renewable energy directive equally should promote the recovery of unavoidable waste heat.
Energy Solutions condenses key input from the dialogue across political and economic decision-makers for a direct response to the realisation of the Energy Union – stay tuned and/or engage with us on @EnerSolutions.