Open letter to the Energy Union cluster of Commissioners

The Energy Market Design Initiative is crucial to making or breaking the success of an Energy Union with a forward looking climate policy. It can deliver on multiple EU objectives; a greater focus on consumers and innovation; putting energy efficiency first; becoming a world leader in renewables; and implementing the Paris Agreement.

If we get market design right, Europe as a whole stands to benefit:

• Energy poverty can be cut if markets are leveraged to enable and incentivise citizens to save energy, meaning a better deal for families;
• Energy security and resilience can be boosted if a single energy market effectively aligns national activity with EU policy across the continent;
• The lock-in of fossil fuel power generation can be avoided if the role of capacity mechanisms and other direct and indirect support for fossil fuels is phased out;
• Jobs, growth and essential emissions reductions can come to Europe if the deployment of clean and renewable technologies is facilitated for power supply, heating, cooling and transport;
• Europe’s innovative digital industries can get the information and business case they need to deliver the energy systems of the future if energy markets transparently reflect the full cost of delivering both energy and reliability in real-time.

Europe needs faster, more competitive and better connected energy markets to fully integrate the new energy technologies that are needed to drive decarbonisation. A well signalled and transparent evolution of EU energy markets is required.

Starting with the 2030 package, the EU needs markets that deliver affordable, sustainable, and secure energy by:

• Realising the potential of cost-effective energy efficiency and demand response as alternatives to generation through unhindered market access for consumers, enhanced access to information, deployment of smart appliances, and appropriate remuneration so that people and business reap the benefits of consuming less energy and/or consuming energy more flexibly;

• Introducing a sustained programme of smart retirement of surplus resources that starts with the dirtiest and least flexible power sources and leads to no coal in the EU by 2030. This is required both to decarbonise the power system and to tackle the problem of excess generation capacity;

• Regulating and incentivising distribution system operators to act as neutral market facilitators of a more decentralised energy system that, in conjunction with the transparent setting of taxes, fees and network tariffs, strengthens the role of citizens in the production and storage of renewable energy;

• Balancing of supply and demand across Member States through effective interconnections, regional markets (including completing the coupling of balancing markets) and independent, regional system adequacy assessments.

We urge you and your fellow Commissioners to seize the opportunity to deliver an ambitious reform of EU energy markets and put the EU on a course to a brighter, cleaner future.

Yours sincerely,

ALIenergy
Cynthia Carswell, Acting Office Manager

CECED European committee of domestic equipment manufacturers
Paolo Falcioni, Director-General

Change Partnership
Sanjeev Kumar, CEO & Founding Director

Client Earth
Karla Hill, Director of Programmes

Climate Alliance
Thomas Brose, Executive Director

Co-operative Energy
Ramsay Dunning, Managing Director

EU ASE European Alliance to Save Energy
Monica Frassoni, President

ICLEI Local Governments for Sustainability
Wolfgang Teubner, Regional Director for Europe

Leonardo Energy
Hans De Keulenaer, Director Energy & Electricity

ODE Decentraal
Siward Zomer, Director

REScoop.eu – European federation of groups and
cooperatives of citizens for renewable energy
Dirk Vansintjan, President

Som Energia Renewable Energy Cooperative
Gijsbert Huijink, Manager

E3G Third Generation Environmentalism
Nick Mabey, Chief Executive

ECOS European Environmental Citizens
Organisation for Standardisation
Laura Degallaix, Director

EHPA European Heat Pump Association
Thomas Nowak, Director

Energy Cities
Claire Roumet, Executive Director

Energy4All
Annette Heslop, Company Secretary/Director

EREF European Renewable Energies Federation
Dr. Dörte Fouquet, EREF Director

ESMIG The European voice of smart energy
solution providers
Maher Chebbo, President

The Climate Group
Damian Ryan, Acting CEO

Tipperary Energy Agency
Paul Kenny, Chief Executive Officer,

Transport & Environment
Jos Dings, Executive Director

World Future Council
Stefan Schurig, Member of the Executive Board,
Director Climate Energy

WREN Wadebridge Renewable Energy Network
Tony Faragher, Chair

WWF European Policy Office
Genevieve Pons, Director