Electricity market reform
Client: European Parliament
Neon team: Ingmar Schlecht, Jonathan Mühlenpfordt, Anselm Eicke
Project partners: Bruegel
Published: 2023
In March 2023, the European Commission proposed a reform of the EU electricity market, sparking debate over CfDs, PPAs, price caps, and peak shaving. Together with Bruegel, we assessed the proposals for the European Parliament’s ITRE committee. Based on a quantitative model of contractual arrangements, we evaluated the market design against the criteria of operational efficiency, fairness, and smart investment. Key recommendations: consumer protection should not blunt short-term price incentives, long-term contracts such as CfDs must preserve operational efficiency, and excessive tinkering with flexibility incentives should be avoided.
Prof. Dr. Lion Hirth
hirth@neon.energy
+49 157 55 199 715
