The European Commission has proposed a new energy reform package that aims to triple the EU's renewable energy production by 2030. The plan will also facilitate the phase-out of gas use, reducing dependence on Russian resources. The reforms come after a period of volatility in EU energy markets.

A number of EU legislation are likely to be amended, including the Electricity Code, Electricity Directive and the REMIT Regulation. Incentives will be offered to non-fossil energy producers to encourage them to expand their operations, including contract extensions. The European Union seeks to use renewable energy as a means of increasing energy security and accelerating decarbonisation.

The deal is part of the Green Deal for Industry scheme, which will be implemented alongside the European Green Deal and REPowerEU schemes. The plan aims to increase the competitiveness of Europe's net-zero energy industry.

EU Energy Commissioner Kadri Simson said in a statement that the new plan comes at a time when global supply constraints and Russian manipulation of our energy markets have left many consumers facing significantly higher energy bills. The measures we are proposing today will increase the stability and predictability of energy costs across the EU.

proposed reforms

The EC will deploy long-term power purchase agreements through which companies can build their own direct energy supplies. Contracts for difference will also be used to stabilize the price of electricity sold by producers, with member states obliged to pass excess revenue back to consumers.

The EU will also implement forward contracts, locking in future prices, to account for potential volatility in energy markets. New obligations and deadlines will be established to encourage implementation. The EC also seeks to prevent potential market abuse by strengthening supervision and strengthening the role of the Energy Regulators Cooperation Agency in investigations. Natural gas, which will be phased out through reforms, still underpins most of the EU's electricity production. In 2021, a third of the EU's electricity will come from burning natural gas. No timetable for the phase-out was given.Editor/XingWentao