The European Council and the European Commission have agreed on the new Electricity Regulation and Electricity Directive, concluding the political negotiations on the Clean Energy for All Europeans package. The regulation now requires to be formally approved by the European Parliament and the Council. It will then enter into force immediately and has to be transposed into national law within 18 months.
The new Electricity Regulation and Electricity Directive sets rules for trading, balancing and capacity markets. It aims to establish balancing responsibility for renewable electricity producers to ensure their integration in the market without creating discriminatory provisions or market distortions. The directive also unveils new rules to limit capacity mechanisms, which several member States have developed to provide back-up generation in times of insufficient power supply. The document stipulates that they have to be temporary and specifically designed to address an identified resource adequacy concern.
Under the new rules, new thermal power plants emitting at least 550 gCO2/kWh and starting operations after the regulation entering into force will not be allowed to benefit from the capacity mechanism, while existing power plants emitting more than the 550 gCO2/kWh threshold will be allowed to participate in capacity mechanisms until July 2025 only.
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