Electricity Market Design

Any electricity market reform should focus on supporting the goals of the European energy policy:

Achieving a power system that is secure, affordable, sustainable and increasingly integrating renewable energy sources. Two different market design options are currently under discussion at EU level:
The establishment of Capacity Mechanisms (CM) or the further improvement of the Energy Only Markets (EOM), including prices which reflect actual scarcity.

EUGINE would like to highlight that only the further improvement of the energy-only market is a suitable solution, providing the right investment signals and which is compatible with the internal energy market.

To achieve a successful European energy transition at minimum cost, EUGINE recommends solutions which are European-wide, based on market forces and empowering market players:

1.    Turning the Energy Union communication into European solutions

1.1. Addressing the power system adequacy issue at EU level to make unilateral interventions (capacity markets, strategic reserves) unnecessary
1.2. Accelerating the Integration of the Internal Electricity Market (market coupling, network codes, policy harmonisation)
1.3. Strengthening investment signals (2030, ETS reform)

2.    Utilising market forces to develop flexibility at minimum cost

2.1. Investments should be driven by price signals (without caps), not by distorting interventions locking-in non-flexible and polluting technologies
2.2. Technology neutrality is needed to guarantee a level-playing field and a competition leading to reduced costs for society
2.3. Value for flexibility should be created to provide clear signals for investments in cost-efficient flexibility solutions

3.    Empowering market players to foster self-balancing and ensure security of supply

3.1. Sharing responsibility: All market participants should have the same balancing responsibilities
3.2. Cost-reflectivity: the imbalance charge paid by the participants creating imbalances should reflect the full costs (availability & utilisation fees)
3.3. Marginal pricing: “pay-as-cleared” pricing methodology for balancing energy would incentivise self-balancing and thus flexibility solutions
3.4. Shorter time frames are needed for a more dynamic, competitive and liquid procurement of reserves by TSOs and market participants


Adoption of MEP Langen's report on market design

Following the adoption of MEP Langen’s report “Toward a new energy market design” by the European Parliament on 13 September, EUGINE Secretary General Ralf Wezel expressed his satisfaction.

Read the entire press release


Capacity mechanisms: EUGINE contribution to the public consultation

The fact that 28 capacity mechanisms were found in the 11 countries selected by DG Competition shows to what extent the internal market threatens to be distorted and undermined by purely national considerations. EUGINE regards this sector inquiry as a...more >


Market design: EUGINE contribution to the public consultation

As centre of knowledge for engine power plant technology and electricity market design, EUGINE welcomed the consultative communication on market design the European Commission published on 15 July 2015. The European Engine Power Plants Association is pleased to have the...more >


Press Release: Full support of EUGINE for a new market design

The European engine power plant industry highly welcomes the consultative communication on the electricity market design published today by the European Commission. "This initiative of the European Commission can become a major milestone on the path to a functioning future-compliant...more >


Designing Electricity Markets - EUGINE recommends solutions for a Successful Energy Transition

To achieve a succesful European energy transition at minimum cost, EUGINE recommends solutions which are European-wide, based on market forces and empowering market players:

EUGINE - Background Paper on Designing Electricity Markets for a Successful Energy Transition


Position Paper - EUGINE response to German Greenbook consultation

EUGINE participated in the German Greenbook consultation.The EUGINE paper has been published on the website of the Bundesministerium für Wirtschaft und Energie (BMWi).

EUGINE response to German Greenbook consultation

EUGINE Beitrag zur Grünbuch Strommarkt Konsultation