The current market fails to generate pricing signals allowing full cost recovery of power generation. The European Commission decided to introduce a set of measures to ensure generation adequacy and supply security. The measures are further detailed in network codes, explains Jan Ondřich. The European Commission (EC) realises that the current market fails to generate pricing signals allowing full cost recovery of power generation. The EC therefore decided to introduce a set of ambitious measures to ensure generation adequacy and supply security. Specifically, the EC wishes to: promote investment into new low-carbon energy systems; promote competition on the wholesale and retail markets; make retail part of the solution, i.e. retail-level consumers and producers should participate in the wholesale and balancing markets (e.g. via demand integrators and virtual power plants); retail pricing should be closer to real-time delivery; increase system flexibility and connectivity; make support schemes market-based, avoiding overcompensation and market distortion; and implement scarcity pricing method (i.e. commodity only pricing). Capacity payments should be considered measure of last resort and only on harmonised EU level … Continue reading What does EU power market reform mean for Central and Eastern Europe power markets?