EU Climate Policy and Electricity Market: Developing a Climate Change Lens to analyze and inform the EU debate on the reform of the Electricity Market Design

ERCST initiated its workstream on “EU Climate Policy and Electricity Market”, in January 2023, to analyze and inform the EU debate on the electricity market reform through climate lens.

The European Commission (EC) has published its legislative proposal on Electricity Market Reform on March 14, 2023. EC’s reform package aims to address the shortcomings revealed by the energy crisis and maximizing the benefits of renewables.

Following the EC reform package on Electricity Market Design, ERCST Team published the framework matrix which is developed for looking at the proposal through a climate policy lens. The two-dimensional framework matrix provides stakeholders a tool for examining and analyzing the proposal.

This report presents the results of further analysis on how the electricity market design elements, in interaction with Climate Change Policies (particularly EU ETS and RED), impacts the desirable outcomes defined in the framework matrix.