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FTI Consulting Study Finds European Electricity Market Framework Obsolete and in Need of Major Reform
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The study finds that the current market framework for electricity in
Its publication is timely and significant, following the
Toward the Target Model 2.0 provides a comprehensive assessment of all the issues facing the current European electricity markets, including how to better coordinate investment between networks; centralised and decentralised generation; securing revenues for investors in order to facilitate financing and reduce cost for consumers; the lessons to be learned from hybrid markets in
The six-month study also presents a set of radical ideas for the reform of the European power and carbon markets. These ideas include the following:
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Refocusing market reforms toward long-term investment incentives, in addition to the historical emphasis on integrating day ahead markets, which provide short-term price signals to balance the system in real time;
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Introducing a carbon price floor at the European-level, in order to provide a long-term bankable carbon price signal and stimulate investment in clean technologies;
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Promoting long-term contracts, which support lower cost financing by implementing contracting obligations on suppliers;
- And reinventing coordination in a fragmented value chain by implementing certain planning and coordination mechanisms at the regional and European-level, such as regional renewables development plans consistent with the network development plans.
"The current power markets were designed in the 1990s in a different policy context. A major shift in focus is needed to deliver the investments required," explained
To learn more about FTI Intelligence's Toward the Target Model 2.0 study, contact
About the Study
The Toward the Target Model 2.0 study is authored by members of the FTI-CL Energy practice, a cross-practice team of energy experts from
About FTI Intelligence
FTI Intelligence is a comprehensive online resource for energy markets news and research. In addition to the energy markets newsletters, FTI Intelligence hosts industry-related news and events, as well as comprehensively researched publications. These data-driven publications, available for purchase on the FTI Intelligence Webstore, will offer in-depth analysis and strategic insight on competitive markets, policy, finance, technology and business models across the energy spectrum for both established and emerging markets.
About
CONTACT: Investor Contact:Mollie Hawkes +1.617.747.1791 mollie.hawkes@fticonsulting.com Media Contact:Michael Rosen +44.20.3727.1751 michael.rosen@fticonsulting.com