currENT responds to consultation on Electricity Market Design

currENT has responded to the consultation on the Electricity Market Design launched by the European Commission. Below you can find a summary of our responses. Click here to read our full consultation response.

Overview of recommendations in consultation response

  • A transmission access guarantee may encourage more offshore renewables, but this should be carefully implemented to ensure new offshore renewable connections are not refused by TSOs. This approach does not solve the larger problem of constraints throughout the grid and especially on interconnectors leading to existing renewable plants being curtailed and large constraint costs being passed to the consumer. A better approach would be to implement a wider reaching profit/cost share of constraints all around the grid (including offshore windfarms).
  • Implement the NOVA principle: while it is clear that large investments in the network are needed to reach Net Zero in 2050 in the meantime the NOVA principle (optimisation ahead of reinforcement, ahead of reinforcement) should be implemented at EU and national level, with full transparency on how these decisions were taken.
  • Set up competitive processes to seek either speed and/or cost improvements to all grid expansion projects that are proposed. This would ensure the size of price spikes due to lack of network capacity is reduced.
  • Existing incentives strongly favour high-cost investments over lower-cost (digital) solutions that could greatly increase the efficiency of the electricity system. Other regulatory measures could work better, such as TOTEX-regulation, efficiency first requirements, benefit sharing, pathfinders, sandboxes, etc., depending on how high the technology-readiness level is.
  • The EU could greatly benefit from a rapid procurement mechanism that could speed up the approval of new technologies, in order to address energy security already in the upcoming winter. Much work can also be done to support grid operators in procuring innovative grid technologies.
  • Increased transparency is crucial to ensuring smart investments are made to use the network as efficiently as possible. For example, by giving open access to TSO’s modeling data, in order to model alternative scenarios that use innovative grid technologies. EU-wide curtailment data would also be useful in showing the benefits of innovative grid technologies.
  • Contracts for difference can be efficient in mitigating the impact of short-term markets, but greater network interconnection of existing market pools should be considered first by incentivising increased interconnection capacity development.