EU energy ministers aim to reach agreement on new electricity market design

The EU energy ministers will convene in Luxembourg on 17 October 2023 for the first official Energy Council under the Spanish Presidency. The ministers will seek a general approach on a proposed Regulation to improve the EU’s electricity market design. Minister of Climate and the Environment Kai Mykkänen will represent Finland at the meeting.

The Commission’s proposal on the electricity market design aims to respond to the concerns of end-users of electricity, industry and investors regarding price volatility. Its objective is to improve consumer protection and the possibility of concluding long-term electricity purchase agreements. It also proposes support mechanism models for production and flexibility.

The reform aims to make the EU energy market more stable and sustainable, protect consumers and businesses from price volatility and encourage investments in renewable energy sources.

Finland welcomes the proposal to reform the electricity market design

Finland supports the general approach proposed by the Council. The legislative package includes several elements important for Finland. That is why Finland considers it important that an agreement be reached at the meeting on an outstanding issue concerning support mechanisms for new electricity generation, i.e. the so-called two-way contracts for differences (CfDs).  

Finland emphasises the possibility for Member States to make use of the most appropriate and effective support mechanism for redistributing the revenue exceeding the possible guaranteed price of CfDs, while avoiding an unreasonable administrative burden.  

The general content of the proposed Regulation and Finland’s positions are described in the Government’s U communication U 3/2023 vp submitted to Parliament this spring.

Finland and Estonia to brief on the effects of pipeline damage on energy supply

In other matters, Finland and Estonia will inform the Council on the damage to the Balticconnector gas pipeline and its impacts on the countries’ energy supply as well as on the fault detected in the telecommunications cable between the countries. Led by the National Bureau of Investigation, the Finnish authorities are investigating the events related to the gas pipeline while cooperating closely with Estonia. Finland’s security of supply remains stable, and gas supply is secured through the LNG terminals in Inkoo and Hamina.   

The Commission will also inform about the updates to the National Energy and Climate Plans (NECPs). Finland submitted its draft NECP to the Commission at the end of June. The Commission will assess the draft NECPs and provide feedback on them by the end of the year. Member States are required to submit their amended NECPs to the Commission by 30 June 2024 on the basis of the feedback received. 

Finally, the Commission will give ministers its assessment of preparedness for winter 2023–2024.

Inquiries: 
Riku Huttunen, Director General, Minister of Economic Affairs and Employment, tel. +358 50 431 6518 
Elina Johansson, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 301 4607 
Sanna Ek-Husson, Senior Specialist, Permanent Representation of Finland, Brussels, tel. +32 470 206 178