Overnight, EU policymakers reached an agreement on the revision of the Electricity Market Design (EMD).
As part of the deal, a proposal to extend inframarginal market caps was left out.
Negotiators decided to design criteria at EU-level for triggering an emergency, including average wholesale prices two and a half times higher than the average of the previous five years (excluding potential crisis years) and at least 180/MWh.
As part of the revisions, the EMD mandates Member States to remove all barriers to the development of the power purchase agreement (PPA) market and to design incentives, including state-backed guarantees.
Developers will be able to choose whether they wish to receive state aid via CfDs, go the market route via PPA, or use both solutions for different parts of a single power plant.
The Commission will further evaluate the need for publishing an EU PPA platform and/or standardised PPA contracts.
The EMD also enshrines, for the first time, a right to share energy and sets a clear framework for all parties involved, including for large industrial consumers if provided so at national level.
It will enable collective self-consumption (energy sharing) based on pioneering models in France, Spain and Portugal, and enable the creation of new business models to harvest the full potential of rooftop solar while supporting the grid.
Naomi Chevillard, Head of Regulatory Affairs at SolarPower Europe, said: “We now have clear path forward for long-term investments into renewables.
“We are relieved to see an end to the current implementation of market caps, which has been fragmenting the EU market and harming renewable investments.
“Negotiators have given the solar sector much-needed legal certainty by setting clear rules at EU-level for declaring an emergency situation.”
The EMD also includes positive provisions that will support a smoother connection to the grid and help Europe more than double its energy flexibility resources by 2030.
Consumers will have the right to request a flexible grid connection agreement, under strict conditions. Grid operators will also need to develop an assessment of flexibility needs in their grid, based on an EU methodology.
Chevillard added: “However, we can only regret the deal found on capacity remuneration mechanisms, prolonging Europe’s dependency on coal.
“Member States should be betting on, and investing in, clean flexibility of the future – like batteries or demand-side response – rather than the out-dated fossil ‘baseload’ of the past.”
The EMD also requires grid operators to develop an assessment of flexibility needs in their grid, based on an EU methodology.