CEPS EXPLAINER - IN THE TIME WE HAVE LEFT, HOW CAN WE REALISTICALLY REFORM

Considering that the Commission’s proposal is expected to be released by the end of the first quarter of 2023, the focus of the debate should now be on the results that such reform could or should achieve during what (little) time remains of the current European Parliament’s term. [...] THE EVOLVING REFORM OF THE ELECTRICITY MARKETS The debate on reforming the electricity market was not ignited by the start of the war in Ukraine. [...] will require considerable time, for example to A comprehensive reform of the prepare the Impact Assessment, prepare the electricity market will require groundwork for the political and technical considerable time, for example to prepare the Impact Assessment, discussions, and then for the Commission to draft prepare the groundwork for the the legislative proposal for the Council and the political. [...] THE POTENTIAL OF LONG-TERM CONTRACTS In the public consultation launched in February 2023, the European Commission states that: ‘… there is a need to complement the regulatory framework governing these short- term markets with additional instruments and tools that incentivise the use of long-term contracts to ensure that the energy bills of European consumers and companies - and the revenues of in. [...] If the competitors of an industrial consumer are exposed to the pool price, the least risky strategy by the industrial consumer is to remain indexed to the pool price, as it is the only way to guarantee that it will face the same production costs than its rivals.