NEWS / Views and positions

CLEAN ENERGY FOR ALL EUROPEANS – winter package of measures

Position of the HSE Group

At the end of November 2016 the European Commission (EC) proposed an extensive package of measures which demand considerable changes in all fields of the energy legislation in the European Union (EU). The Clean Energy for All Europeans package (also known as the winter package) looks to enhance the functioning of the market and reach the climate and energy goals of the EU by introducing a new concept of the power market both in the retail and wholesale segments. The rules of operation in all segments of the power market are being changed significantly, which significantly affects the operations of the HSE Group, which is why the HSE Group is actively involved in the final drafting of the new legislation by putting forward amendments to the proposed measures, which are in our opinion necessary for an efficient functioning of the power market in the EU after 2020

In the opinion of the EC, such an extensive overhaul of the energy legislation is needed because of:

  1. the inefficient functioning of the energy market,
  2. the transition to a low-carbon society, which demands a new concept of the power market after 2020.

The Clean Energy for All Europeans package (also known as the winter package) thus looks to enhance the functioning of the market and reach the climate and energy goals of the EU by proposing a new concept of the power market both in the retail and wholesale segments.

The proposals from the winter package thus significantly change the rules of operation in all segments of the power market, and have a significant impact on the operations of the HSE Group, which is why the HSE Group is actively involved in the final drafting of the new legislation by putting forward amendments to the proposed measures, which are in our opinion necessary for an efficient functioning of the power market in the EU after 2020

An overhaul of the existing legislation is certainly needed, because the business environment in which energy companies operate has changed. Wholesale prices of electricity have dropped strongly, while prices for end users are increasing, in part because of ineffective support schemes for renewable energy. Renewable energy has also affected the (non)functioning of the European Union Emissions Trading Scheme (EU ETS). Due to a higher share of variable renewable energy, the energy market is facing the need for reliable resources which are always available, while the market does not provide adequate incentives for such resources.

Investments in the energy sector which are needed to attain the ambitious objectives until 2030 that have been proposed, will be implemented only under the assumption of market feasibility and while providing safe and reliable electricity supply. In order to ensure economic feasibility of projects, without which an investor will not decide to invest, the state may contribute to improving the investment conditions under which it would be easier to implement an investment by means of certain mechanisms: capacity mechanisms, effective support scheme, proportionate burden on market players, improving the efficiency of siting procedures. Ensuring a stable policy and regulatory framework, which is of key importance for investors, has a special importance in this respect.

The HSE Group will strive for the following principles to be taken into account in the overhaul of the EU legislation:

  • ensuring equal treatment and rules for all participants on the market;
  • ensuring technological neutrality in all fields of operation of the power market;
  • facilitated integration of renewable energy in the market after 2020;
  • capacity mechanisms are a measure to ensure reliability of supply – capacities which are included in them should meet the same environmental and other conditions applied for other capacities on the market;
  • the EU ETS system must become a key mechanism for attaining the objectives of the climate and energy policy of the EU;
  • ensuring a stable and predictable framework for the participants on the market;
  • the proposed measures must not be retroactive.