It was the best of times, it was the worst of times.

Rarely the whole world agrees on the same thing. Today, I guess we all agree that we live in uncertain times and have gone through multiple crisis.

For me, as Dickens put it “It was the best of times, it was the worst of times”.

The consequences of the Russia-Ukraine conflict, natural disasters, energy crisis and financial markets turmoil have been in the news over the last few months. Yet, moments of crisis tend to lead to transformations and breakthroughs. It is our responsibility, as individuals and as part of communities and organizations, to learn and create the opportunities to make it better and turn things around.

This applies to the energy sector as well. We have been – and are still – faced with volatile and high prices, concerns about energy supply and the clear need and urgency to make the Energy Transition a reality.

Europe is struggling in this context. The European electricity Market Design is under revision, in a process led by the European Commission.

Also here, it is our responsibility – as individuals and organizations – to ensure a robust, resilient and stable energy system that promotes affordability, security of supply and sustainability. At EDP we are contributing to the undergoing revision of the European market design, which we believe must:

• foster the needed investment in renewable energies while ensuring the existence of firm and flexible capacity, namely through the promotion of long-term contracting instruments, such as Power Purchase Agreements (PPAs) and Contracts for Difference (CfDs), that allow for stability and predictability. These should be market based and voluntary!
• guarantee that consumers have the tools to shield themselves against the risk of excessive volatility, namely by giving them the option of fixed (hedged) prices, but without imposing solutions or price structures on suppliers that may not be efficient or fit to the consumer needs;
• provide for an adequate network framework ensuring that system, transmission and distribution operators have the correct incentives and tools to implement the infrastructure needed for the energy transition, and to make the best use of flexible resources connected to their grid;
• make clear that emergency measures implemented (including caps and clawbacks) cannot become structural features of the revised market design framework but temporary measures to address the root of the problem;
• be properly adopted by Member States and coherent at a European level, avoiding fragmentation of the Internal Energy Market.

Finally, one must give time for the dust to settle. Once the revised Market Design is decided, albeit small adjustments may be needed, time has to be given for Member States, companies, consumers, and stakeholders in general, to adopt the changes and incorporate them in their day-to-day activity. There is still so much regulation and legislation that has been produced by the European Union and which has not been transposed (or, is some cases, not correctly transposed) by the Member States and more and more keeps being produced.

Less is more. We need to “keep it simple”. Constantly changing the rules of the game does not promote an environment conducive to the much needed investment in the Energy Transition.

Again, the responsibility for action is up to all of us. To make it “the best of times”, we must make the right choices now and design the future of the world we want to live in.

#WeChooseEarth #EnergyTransition