Originally published by RaboResearch on September 15, 2022 – The complex task of reforming the EU’s electricity market. Since then, the policy interventions debate on EU’s electricity markets further crystalized in some aspects. For example, to ease the liquidity constraints that certain energy companies face, besides banks and governments stepping in to help with credit facilities, the European Commission put forward two measures to address this issue. The first one relates to increasing from EUR 3 bn to EUR 4 bn the threshold from which companies are subject to margin calls. The second one enlarges for a temporary 12 months period the spectrum of assets that can be used as collateral to cover futures power contracts to include also uncollateralised bank guarantees and public guarantees. Furthermore, national governments
introduced various retail power price caps and demand reduction measures. Yet, there are aspects that need further clarification. For instance, the heated debate on how or if to intervene in the natural gas markets is still ongoing. The discussion concentrates now on exploring ways to implement dynamic natural gas price corridors and on creating an new LNG linked natural gas price benchmark as an alternative to the Dutch TTF benchmark. Moreover, we know that member states can implement revenue caps on the inframarginal producers of up to EUR 180/MWh for the period between December 1, 2022 and June 30, 2023. However, we lack clarity on how member states will act upon this. Member states can choose freely the way they implement such caps in their local legislation, and this brings additional uncertainty over the next few months.