Deal reached on EU energy market design, incl end of coal subsidies

Negotiators reached political agreement on the EU’s Electricity Regulation and Electricity Directive early on Wednesday, and set the end date for coal subsidies.

The aim of the new EU energy market design is to have more renewables and better manage energy flows across the EU, foster greater competition and allow consumers to participate more actively in the market and contribute to the clean energy transition.

“I am particularly pleased that we agreed on a balanced approach to limit capacity mechanisms and reconcile security of supply with our climate objectives. Capacity mechanisms will not be used as a backdoor subsidy of high-polluting fossil fuels as that would go against our climate objectives,” said Miguel Arias Cañete, Commissioner for Climate Action and Energy.

The Directive and the Regulation introduce a new emissions limit for power plants eligible to receive subsidies as capacity mechanisms. Subsidies to existing plants emitting 550 grams of carbon dioxide (CO2) per kWh or more than that will be phased out over a period of five years. For new plants, the 550 rule will be effective as soon as the new rules enter into force.

After 17h of negotiations, we have a deal on #MarketDesign!
For 1st time we have a clear end date for subsidies to existing coal plants: mid 2025. But a minority blocked #Support550 on grandfathered contracts. We need more but it's a step towards #BeyondCoal. Last call for coal! pic.twitter.com/zxq5uoFceS

— Florent Marcellesi (@fmarcellesi) December 19, 2018

Last night’s agreement concludes the political negotiations on the Clean Energy for All Europeans package. It is described as a major step towards completing the Energy Union and combatting climate change.

The texts of the Directive and Regulation will now be prepared in all EU languages before being formally approved by the European Parliament and the Council in the coming months. The Regulation will enter into force with immediate effect after being published in the Official Journal of the Union, while the Directive will have to be transposed into national law within 18 months.

Clean energy for all Europeans package - state of play (December 2018).

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