As electricity demand continues to grow and electrification accelerates across Europe, there is an urgent need to reinforce and modernise electricity grids. Tariff design has an essential role in supporting efficient grid use, keeping electricity prices cost-competitive and enabling the development of grid capacity where it is most needed. At the same time, tariffs should avoid barriers to an efficient internal electricity market and prevent distortions to competition in wholesale electricity markets.
The Grid for Speed study identified flexibility, digitalisation and anticipatory investments as key points for a more efficient electricity system. By making better use of existing infrastructure and improving long-term network planning, these measures could reduce overall grid investment needs by up to 18%, equivalent to annual savings of around €55 billion. Therefore, the regulatory framework should ensure predictable revenues for DSOs, support investment decisions, while reflecting national and local specificities. The proposal must strike the right balance between flexibility and tariff harmonisation, particularly where differences in tariff design could affect the functioning of the internal electricity market, such as through injection charges.
Eurelectric and its members believe that with targeted adjustments, the proposal could better support operational realities and strike the necessary balance. We have identified in our paper:
- Elements that should be retained;
- Provisions requiring targeted amendments to ensure predictability, cost-reflective signals to grid users and investment incentives;
- Missing elements that are essential to ensure regulatory certainty and facilitate the large-scale investments required for European electricity network.
With these changes, the proposal could efficiently support system operation and investment decisions while maintaining affordability and competitiveness and a well-functioning internal electricity market in the long term.