The EP approved the reform of the EU electricity market: how Lithuanian electricity suppliers react to it | Business

The EP, following coordination with the EU Council, approved the new rules, which were adopted by a majority of votes: for – 433, once morest – 140, abstentions – 15. According to these rules, electricity consumers will be able to choose between fixed and variable electricity tariffs, and suppliers will be prohibited from unilaterally changing contract In addition, it is foreseen that EU member states will be able to limit the possibility of cutting off the electricity supply to the most vulnerable persons and ensure support for consumers in cases of disputes with suppliers.

The regulation also includes contracts for difference, where the public sector will compensate electricity producers for losses when electricity prices fall below a certain level, but producers will have to return surpluses if prices exceed set limits. This should encourage investment in electricity generation infrastructure.

A crisis declaration mechanism for electricity prices will also be introduced, allowing the EU to declare a crisis in the region or across the union and giving member states the opportunity to temporarily regulate prices to protect small and medium-sized businesses and industries that use electricity intensively.

“These reforms will help protect the interests of all, especially the most vulnerable, and promote the growth of the renewable energy sector, ensuring long-term, affordable and stable electricity prices for all consumers,” said EP rapporteur Nicolás González Casares (Socialists and Democrats, Spain).

The new rules have already received the approval of the Council of the EU, but formal approval by this institution is still required before they come into effect.

Lithuanian electricity suppliers welcome the rules calmly

Commenting on the new regulation, Vidmantas Salietis, member of the board of Ignitis Group, head of the group’s commercial services, said that his company positively assesses the decisions made.

“It is important to emphasize that the improvement of the European Union electricity market model includes more important decisions, including measures for the development of renewable energy resources, as well as greater protection for consumers,” the interviewer emphasized.

According to him, one of the goals of the reform is competitive and affordable electricity prices for consumers, which completely coincides with the company’s approach.

“In our opinion, perhaps the most important thing is that the improvement of the market model foresees actions that encourage investments in renewable energy resources (RES) and ensure long-term transactions between RES project developers and users.” This is also very important for residents, because the higher the share of green production, the more competitive the prices in the electricity market, while long-term deals guarantee market stability. So, this means greater protection for customers,” said the board member of Ignitis Group.

According to V.Salietis, the specific changes that will need to be implemented will depend on how the legal acts will be transferred to the Lithuanian legal base, but, in their assessment, there will be no need for fundamental changes in the company’s activities from what is being done now.

“In terms of greater consumer protection, in recent years both Ignitis as an electricity supplier and the state have taken steps to create the most favorable conditions for customers, therefore, in our estimation, a large part of the ideas envisaged by the improvement of the EU market model have already been implemented”, – emphasized the representative of Ignitis.

For his part, Mantas Kavaliauskas, head of product development at Elektrum Lietuva, says that the new reform of the electricity market was triggered by the 2022 energy crisis, so it is mainly aimed at managing such situations so that there is no reason for it to happen once more in the future.

“Basically, the reform aims to develop the energy of renewable resources faster and abandon natural gas so that electricity prices are as little dependent on it as possible. Consumer protection would also be improved, market competition would be increased, and the impact on the environment would be mitigated,” said M. Kavaliauskas.

According to him, the expected changes are complex, but for now it is difficult to say how and when the provisions of the adopted legal acts will be implemented in the countries of the European Union.

“No less than 2 years are usually set aside for implementation, during which the state must adopt the necessary amendments to legal acts. Therefore, we cannot yet really assess how these changes will affect our local market, consumers and suppliers”, explained the product development manager of Elektrum Lietuva.

However, according to him, even before the full-scale reform has come into force, it can be seen that the implementation of some goals is already moving quite rapidly.

“The development of green energy has gained a certain momentum throughout Europe, including in Lithuania. In addition, here we have guaranteed and fairly strong consumer protection, so the residents of our country may not even feel some of the changes,” emphasized M. Kavaliauskas.