Wind industry calls for investment signals to be restored as countries shape positions on electricity market reform

In mid-March, the European Commission presented a proposal to reform the EU electricity market. Wind energy representatives are urging policymakers to avoid major changes to the proposed directive and to stick as closely as possible to the Commission’s original proposal. According to industry association WindEurope, radical market interventions could deter investors and curb investment, particularly in offshore wind farms. The final shape of the reform will take form over the coming year.

Changes to the design of the EU electricity market set out by the European Commission last month aim to make it easier for businesses to conclude long-term power purchase agreements (PPAs) between energy companies and electricity consumers, while also helping developers manage counterparty risk, which can deter investors.

Under the proposals, all customers will have the right to request long-term fixed-price contracts. Energy companies and other suppliers will have to manage price risks and hedge part of their supply portfolios against potential fluctuations in wholesale prices. National governments, in turn, will have to ensure that companies have access to market guarantees that protect them against customers’ inability to pay.