EU consumers must have fixed electricity prices for one year.

The European Commission, in the European Union (EU) Electricity Market Reform Project, argues that European consumers should be able to sign contracts at fixed electricity prices for at least one year, protecting “a wider range of contracts”.

“Member States shall ensure that end-users who have a smart meter installed can apply for a dynamic electricity price contract and that all end-users can apply for a fixed-price electricity contract for a period of at least one year with at least one supplier, and each supplier has more than 200,000 end users,” defends Brussels.

The rate is part of a project that Lusa had access to, a proposal to reshape the EU electricity market that the community executive will present next Thursday, in which the organization stresses that countries should “ensure that a national regulatory framework allows suppliers to offer contracts with a fixed and dynamic price for electricity”.

Following the energy crisis exacerbated by the war in Ukraine and the current energy crisis, Brussels acknowledges in the draft proposal (which is subject to change before final publication) that “the reflection of short-term prices on consumer accounts has led to price shocks.” , resulting in many consumers’ electricity bills tripling or quadrupling.

“Therefore, the proposal includes a set of measures aimed at creating a buffer between short-term markets and electricity bills paid by consumers, in particular by encouraging long-term contracts, with the aim of improving the functioning of markets in the short term to better integrate renewable energy sources and strengthen the role of flexibility, as well as empower and protect consumers,” the organization emphasizes.

The goal is to develop “measures to protect consumers from such volatility, provide them with a greater choice of contracts and more direct access to renewable energy,” he adds.

The European Commission acknowledges that the acute energy crisis has revealed that the EU “does not have enough tools to protect consumers, including companies, from high prices in the short term”, there is an “excessive impact of fossil fuel prices on electricity”. prices and the fact that cheap renewable energy and low-carbon energy are not better reflected in the bills”, and that there is still “a limited choice of types of supply contracts”.

It is this situation that the community leader wants to change by providing for “the right to fixed price contracts as well as dynamic price contracts, the right to multiple contracts and better and clearer contractual information.”

The European Commission will present next week its proposal to reform the structure of the EU electricity market, aimed at better protecting consumers from excessive price volatility, facilitating their access to safe energy from clean sources and increasing market resilience.

In the current configuration of the European market, gas determines the global price of electricity when it is used, since all producers receive the same price for the same product — electricity — when it enters the grid.

There is a consensus in the EU that the current marginal pricing model is the most efficient, but the acute energy crisis exacerbated by the war in Ukraine has sparked debate given Europe’s dependence on Russian fossil fuels.