“Non-reform.” This is the term used by the latest EsadePol report, Esade's economic Thin Tank, to describe the reform of the electricity market as defined in the latest reform approved in Brussels. The document considers that the reform puts the European single market at risk since it does not include the design of a common capacity market and gives states excessive flexibility in the design of these policies that may be divergent.
In fact, the only positive point that the report highlights about market reform is “the establishment of a common emergency mechanism” that provides the European Union with the capacity to define potential aid to consumers, when the situation of the markets as specified, “at a flat rate” so that “it does not distort the price signal.”
On the contrary, the report identifies three key aspects in which the reform “falls short.” The first is the aforementioned absence of a common capacity market.
He also questions that the new price formation system that combines short-term signals with long-term signals is not “aligned with the structure of a market in which high penetration of renewable energies is expected.”
Analysts assure that too much weight is still given to marginal energies such as gas that set the maximum price and encourages renewables to continue setting zero prices with increasing frequency, which is not attractive for investment in new projects.
The analysis goes so far as to question the star instruments that the reform has sold, such as Contracts for Difference (CfD) and Power Purchase Agreements (PPA), which they consider to have already existed and rather than as financial tools, they have been defined as public aid designed so that they can be accessed especially by large corporations and not very accessible to SMEs.
