EUTurbines Position on Electricity Market Design
EUTurbines welcomes the effort to adapt the electricity market design to the new market reality. The key element of the reform is the recognition of the need for flexibility solutions to balance the variable renewable energy sources as main contributors to a decarbonised energy system.
Flexible dispatchable thermal power plants can provide a considerable share of this flexibility, but need a market framework which ensures that, during a limited number of operating hours, investment as well as operating costs can be recovered. For this purpose, the short-term market prices have to better reflect scarcity. Other tools like capacity mechanisms may be needed, but must reward flexibility and not simply capacity.
The design principles for capacity mechanisms need further clarification regarding the suggested CO2-limit for power plants participating in such mechanisms. This is needed to avoid that also smaller flexible gas-fired power plants, highly-efficient cogeneration and/or biofuel use are excluded.