230015 Portada cast

 Jorge Fernández Gómez
Basque Institute of Competitiveness - Deusto Foundation

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In 2022 and 2023 there was a profound debate in the European Union about the design of the electricity market and its suitability to deal with stress situations in the energy markets, protect consumers and incentivize the necessary investments in renewable energies. The debate was structured around two visions: (1) an interventionist position (e.g., the one defended by the Spanish Government), which emphasized the control of market prices and generators' revenues, largely invalidating the current design, and (2) a reformist position, which sought to complement the current design with elements to improve market resilience and consumer protection and embodied in the European Commission's proposal of March 2023. This report analyzes the development of that debate and discusses the final agreement reached by the European Parliament and the European Council in December 2023, which maintained the essential elements of the European Commission's reform proposal and proposed changes aimed at completing the development of the internal energy market, protecting the most vulnerable consumers, increasing the stability and predictability of the cost of energy and generating incentives for investments in renewable energies and flexibility