Power Purchase Agreements for RES and storage – essential for the EU electricity market
To empower corporate and citizen consumers to benefit more directly from low-cost renewable electricity by facilitating access to renewable power purchase agreements (PPAs) and for accelerated flexibility such as storage to support power system reliability, insists SolarPower Europe (The European Solar Association).
The position of the association is in relation to the public consultation on the design of the electricity market, opened by the EC on January 23, 2023. The aim of the consultation is to focus on urgent adjustments to make the EU electricity market “more resilient and reduce the impact of gas prices on electricity bills while supporting the energy transition”.
The unprecedented energy crisis caused by the increased prices of gas, which the European Commission already defines as a transitional fuel for the EU’s electricity system, and the aggravation of the crisis with drought, require a revision. But this change should not be made by interfering with the fundamentals of the electricity market – by setting price caps that have lead to regulatory instability and halting investments in new renewable technologies. And since the only way out of the crisis is to phase gas out of the power system as soon as possible by dramatically increasing investment in renewable energy and grid flexibility, the design of Europe’s electricity market needs to be revised.
According to Naomi Chevillard, Head of Regulatory Affairs at SolarPower Europe:
“Revised market design should empower corporate and citizen consumers to benefit more directly from low-cost renewable electricity by facilitating access to renewable Power Purchase Agreements. Corporate PPAs for energy-intensive industries should be de-risked through specific guarantees, while the retail energy market must incentivise retailers to conclude PPAs on behalf of their consumers.
The reform must also accelerate clean flexibility – like storage – access to the wholesale and balancing market to support electricity system reliability.
Finally – and returning to the heart of the issue – an electricity market moving towards 100% renewables needs to be based on a resilient and reliable electricity grid. Operators will need to conduct thorough and regular grid planning, consider flexibilities on offer, and their role in the market.
Grid operators will need the right remuneration incentives to invest into the most efficient technologies and permitting procedures need to be fast-tracked to allow for the timely connection of renewables energies.”
>> SolarPower Europe press release can be read here
>> SolarPower Europe Position Paper on Electricity Market Design can be read here