LDES Council Statement on European Parliament Vote for Electricity Market Design
The European Parliament has today expressed its desire to see minimal reform of the Electricity Market Design deal. The European Parliament’s Committee on Industry, Research and Energy (ITRE) formally agreed its position on the ongoing EU electricity market design revision, largely backing the European Commission’s proposal for a targeted reform. The Committee voted to maintain the merit order system and to avoid inframarginal revenue caps which fragment the internal energy market and undermine investor confidence. Critical for the long duration energy storage (LDES) industry, the agreement allows for different routes to market for renewable electricity, including: Contracts for Difference, renewable Power Purchase Agreements, and merchant investments.
Parliament’s position introduces new provisions to support the deployment of flexible technologies, such as energy storage, which will be key in ensuring reliability for a future energy system based on renewable energy.
The deal aligns closely with the recommendations the LDES Council shared earlier this year, and states that EU countries must now assess the flexibility needed in their electricity systems to deploy renewable energy in line with 2030 climate goals, and set a national objective for energy storage. This not only allows for continued improvements to inclusive and long-term grid planning, but also acknowledges the much needed dispatchability and flexibility of energy storage.
With the Commission also introducing a Strategy for Energy Storage from 2025 and the possibility of EU-level targets, the LDES Council supports further actions for existing policies and rules to be amended to include the benefits of long duration energy storage specifically, and promote revenue support mechanisms to ensure rapid deployment of LDES in the EU marketplace.
Members of Parliament highlighted the importance of having a diverse range of routes for renewables to come to market. PPAs and contracts for difference will go a long way to providing consumers, businesses and SMEs with stable prices and renewable energy providers with reliable revenues, which is vital in the balance of supply and demand for power as renewables grow in generation capacity. This will help to improve the investment case for renewables and energy storage in the long run, while setting a future for 24/7 CFE and the ability for long duration energy storage to fully participate in the market.
The LDES Council applauds the progression of the European electricity market and will continue to work closely with policymakers to ensure that LDES is a critical component in delivering a clean and renewable future.