Directive 2024/1711 - Amendment of Directives (EU) 2018/2001 and (EU) 2019/944 as regards improving the Union’s electricity market design - Main contents

Official Journal

of the European Union

EN

L series

2024/1711

26.6.2024

Very high prices and volatility in electricity markets have been observed since September 2021. As set out by the European Union Agency for the Cooperation of Energy Regulators (ACER) in its final assessment of the EU wholesale electricity market design of April 2022, this is mainly a consequence of the high price of gas, which is used as an input to generate electricity.

The escalation of the Russian war of aggression against Ukraine, which is a Contracting Party of the Energy Community Treaty (4), and the related international sanctions since February 2022 have led to a gas crisis, have disrupted global energy markets, have exacerbated the problem of high gas prices, and have had a significant knock-on impact on electricity prices. The Russian war of aggression against Ukraine has also caused uncertainty on the supply of other commodities, such as hard coal and crude oil, used by power-generating installations. That uncertainty has resulted in a substantial additional increase in the volatility of electricity prices. The reduced availability of several nuclear reactors and the low hydropower output have further amplified the increase in electricity prices.

As a response to that situation, the Commission, in its communication of 13 October 2021 on ‘Tackling rising energy prices: a toolbox for action and support’, proposed a toolbox of measures that the Union and its Member States may use to address the immediate impact of high energy prices on household customers and businesses, including income support, tax breaks, energy savings and storage measures and to strengthen resilience to future price shocks. In its communication of 8 March 2022 on ‘REPowerEU: Joint European Action for more affordable, secure and sustainable energy’, the Commission outlined a series of additional measures to strengthen the toolbox and to respond to rising energy prices. On 23 March 2022, the Commission also established a temporary State aid framework to allow certain subsidies to soften the impact of high energy prices.

In its communication of 18 May 2022 the Commission presented its ‘REPowerEU plan’, which introduced additional measures focusing on energy savings, diversification of energy supplies, increased energy efficiency target and accelerated roll-out of renewable energy aiming to reduce the Union’s dependence on Russian fossil fuels, including a proposal to increase the Union’s 2030 target for gross final consumption of renewable energy to 45 %. Furthermore, the communication of the Commission of 18 May 2022 on ‘Short-Term Energy Market Interventions and Long-Term Improvements to the Electricity Market Design — a course for action’, in addition to setting out additional short-term measures to tackle high energy prices, identified potential areas for improving the electricity market design and announced the intention to assess those areas with a view to changing the legislative framework.

In order to address, urgently,...