CEER 2022-2025 Strategy Empowering Consumers For The Energy Transition
CEER 2022-2025 Strategy Empowering Consumers For The Energy Transition
CEER 2022-2025 Strategy Empowering Consumers For The Energy Transition
Empowering Consumers
for the Energy Transition
Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
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TABLE OF CONTENTS
6.2 Flexibility 21
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
Overview and
presentation of the
Energy Transition Strategy
This document presents CEER’s strategy for the years challenges of such development for regulation and want
2022-2025. It is useful to begin with a brief look at the to be part of the solution.
previous CEER strategy that is still in effect at the time of
this document’s publication. Therefore, with a view to promoting the energy
transition and contributing to a carbon-neutral society
In 2019, CEER launched its 3D Strategy which focused on and economy, energy regulators are committed to
three pillars: “empowering consumers for the energy transition”, by:
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CEER decided to run this Energy Transition Strategy
over a period of four years, from 2022 to 2025. The year
2025 is justified for three reasons:
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Trends and targets underpinning the CEER 2022-2025 Strategy
MEGATRENDS:
Climate Change,
Innovation...
EU POLICIES:
Green Deal
Climate Law
OVERARCHING TARGETS:
Decarbonisation Efficiency
Climate Neutrality Sustainability
To achieve the above-mentioned targets, the CEER Strategy builds on the following three
regulatory dimensions for the Energy Transition towards a carbon-neutral society and economy:
CONSUMER-
WELL- CENTRIC ENERGY
FUNCTIONING DYNAMIC SYSTEM
MARKETS/IEM REGULATION INTEGRATION
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
Drawing on these three regulatory dimensions, CEER hexagons illustrate the three interrelated dimensions,
presents its multi-dimensional Energy Transition each split into two aspects, and represent regulators’
Strategy. To make the principles more concrete and ambition to work using a holistic view. The six core areas
implementable, each of the three regulatory dimensions are then further defined in the boxes, highlighting a fairly
consists of two core areas, resulting in a total of six core complete list of topics to be worked on by CEER in the
areas, as presented in the figure below. The colour-coded coming years.
Consumer-
centric
design
Decentralised Sustainable
and local and efficient
energy infrastructure
Empowering
consumers
for the energy
transition Well-
Flexibility functioning
markets
Energy system
integration
The six core areas of CEER’s Energy Transition Strategy further defined:
Megatrends have been identified by numerous research Hereafter, we lay out the result of our analysis for the four
institutes, think tanks, and consulting companies to megatrends (upper right corner of the diagram) that are
describe the long-term zeitgeist. The above diagram most relevant for energy regulation and can be most
shows a list of 16 trends. They have been analysed in influenced by regulators.
terms of three aspects: (a) their proximity to and (b) their
disruptive force in the energy sector as well as (c) the
question of how the trends with a high impact on the
energy sector can be positively influenced by regulation.
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
CLIMATE CHANGE AND GREENING short, energy suppliers can use digital tools to optimise
(trend 9) operations. Additionally, the exchange of information
Over the past decades, the average global temperature between all actors will increase and continue to improve.
has increased at an unprecedented rate. Consequently, Consumers will have more information and knowledge,
more energy will likely be used for cooling and less which will be beneficial for the entire energy system.
for heating, which will affect the delivery of energy.
Moreover, a warmer climate could reduce the efficiency IMPACT ON REGULATION
of energy production. To respond to these increases in Given the digital developments, the communication
demand of energy and cooling, infrastructure will have and work of regulators has already changed and will
to be adapted, potentially requiring investments in continue to do so. In the future, NRAs will have to assist
new energy generation and distribution infrastructure. and support digitalisation of the energy markets in the
Furthermore, reversing the trend of rising temperatures interest of empowering the energy consumers and
will only be possible by raising awareness among embracing the opportunities of data governance and
consumers regarding the environmental impact of digitalisation.
energy consumption and communicating ways to adapt
and reduce their consumption.
INCREASING URBANISATION
IMPACT ON REGULATION (trend 15)
The decade we are entering is critical to decarbonise The increase in the number of people living in cities also
the economy, combat climate change and achieve EU means that the number of energy consumers will rise in
climate goals. Regulators of the energy sector have a urban areas as well as the demand for energy and transport.
centrally important role to play in that regard, working If urbanisation grows (too) rapidly it can lead to increased
within the policy framework set by the EU institutions. challenges for distribution and transmission system
The upcoming climate initiatives of the EU will require operators. Capacity constraints or even scarcity situations,
that all economic sectors be put on track to achieve especially in metropolitan areas, have already occurred in
climate neutrality by 2050. The EU is determined to some Member States. Part of the problem is also that many
revamp this commitment at the next United Nations developers, including regions and municipalities previously
Framework Convention on Climate Change (UNFCCC) have taken access to energy for granted. Urbanisation also
Conference of the Parties (COP) in 2021 and lead by implies structural changes of the economy with industrial
example worldwide in this area. centres being relocated as well.
The energy sector will have to undergo a major Increasing urbanisation also leads to a decline in rural
transformation to achieve net-zero emissions. Regulators populations. Consequently, the energy sector will have
see themselves as an enabler of the shift to a low-carbon fewer consumers in these areas and some infrastructure
energy sector, using the NRA’s powers to encourage will become obsolete. Another aspect in this regard is the
investment in renewables, management of legacy tendency of load and generation drifting further apart. To
assets, supporting innovation (e.g. innovation hubs) meet this shift in demand and ensure system adequacy,
and embracing the opportunities of data governance the energy sector will have to develop concepts concerning
and digitalisation, whilst protecting consumers. Global efficient energy services and infrastructure in urban areas
regulatory collaboration may also be considered. together with distributed generation infrastructure. Better
coordination between different stakeholders and the
energy sector as well as between TSOs and DSOs will also be
INTERNET CULTURE AND DIGITALISATION required.
(trend 8)
The trend towards digital technologies also affects the IMPACT ON REGULATION
energy sector: the productivity of energy systems can be The increasing urbanisation will have an effect on the
improved, making energy systems more connected and energy infrastructure, energy markets and services,
reliable. Because of these technologies, information can which will have to be addressed by regulators. Markets
be processed in real time, which makes it easier to identify and infrastructure will have to be adapted in accordance
who needs energy and to deliver it at the right time. In with these changes.
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AGGRAVATION OF THE ENERGY AND GROWING MOBILITY AND LOGISTICS NEEDS
RESOURCE SITUATION (trend 11)
(trend 3) In order to tackle climate change and also meet the
Demand for food, land, minerals, energy, and other growing need for mobility, the focus of the energy sector
resources is rising, making them increasingly scarce. will likely be faced with new challenges stemming from
Therefore, an exchange with less scare or, ideally, the promotion of sustainable and decarbonised mobility,
renewable resources should become a top priority in all in particular electrification of mobility for everyone and in
the relevant sectors. every area.
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CEER is strongly committed to contributing to the well as industrial users and to the environment. For Europe’s
debate on the most appropriate solutions to promote energy systems to be integrated effectively, they must be
decarbonisation while delivering sustainable, secure assessed and adapted at several stages, from the planning
and affordable energy for all European consumers. of system needs and investments, to the design of the
The European Green Deal has set a series of ambitious market to their resulting operation in practice. Given the
targets and has led us to push forward an integrated long-time experiences and responsibilities of regulatory
vision of the energy system to support this path towards authorities in these various aspects, regulation has an
decarbonisation. Indeed, decarbonisation will require important role in identifying and overcoming barriers as
a greater interaction between sectors (e.g. gas and well as highlighting the need for new areas of regulation
electricity, and also heating/cooling and transport and (for example, hydrogen) and improvement of existing
industry) to identify low-carbon processes at least cost. processes. In this respect, and based on the expertise of its
members CEER will place particular attention on regulatory
Energy System integration tackles the main decarbonisation oversight and governance (including the proper separation
challenges, such as the massive integration of RES to the between market & regulated areas), consistency of rules
system (especially offshore), massive electrification of key and increasing the efficiency of the procedures that apply
industries and mobility. However, for some sectors direct across the energy sector.
electrification will reach limits and thus integration across
the vectors will also be relevant. Furthermore, it is worth underlining the broader
dimension of energy system integration, taking into
The integration of our energy systems can be seen from account the achievement of a circular economy and the
several interrelated perspectives, for example joint interactions between the energy, agriculture, (district)
planning, technology-neutral needs assessment and heating, industry, transport and waste sectors in order
operation of the networks that transport the different to optimise the process of decarbonisation and of the
types of energy carriers as well as coordinated use and resources we use.
management of the resources utilisation at regional and
local levels. With that in mind, CEER has identified two core areas for
this work, which will be addressed in more detail below:
Planning and operating the energy system in a holistic • Energy system integration, in terms of concrete and
way, considering the interlinkages between energy practical policies and actions; and
vectors, energy uses as well as supply and demand, allows • Sustainable and efficient infrastructure, considering
us to optimise the resources and costs faced by all. Crucially, its specificities and the challenges in promoting its
it promotes efficient choices, at least cost to consumers as effective integration.
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4.1
ENERGY SYSTEM
The future energy mix will be based on a wide range of
technologies. The increase of renewable energy generation
INTEGRATION
is at the heart of the decarbonisation of the energy system.
Additionally, the growing electricity demand, due to
electrification of industry and transport, leads to the need
An integrated energy system is one which takes into for more and smarter grid infrastructure. Offshore wind
account the adequacy of all the available resources for a energy, for example, has the potential to provide large
secure supply – irrespective of the future energy mix – and amounts of clean energy and is set for robust growth in
manages supply and demand in the most cost-effective the EU. The next-generation electrical power system will
manner. The development of new technologies, such as be increasingly smart and will be one of the fundamental
renewable and low-carbon gases, drives the emergence aspects of the integrated energy system, linking the
of new market trends and solutions. By way of example, planning and operation of DSO and TSO networks.
we note the possibility for a single facility to use waste Using the power of data analytics, monitoring and smart
to produce electricity, (decarbonised) heating and clean communication enables an adequate combination of
gases, illustrating the potential of optimising previously available and cost-efficient resources in the electrical grid.
separate processes and energy carriers. Unlocking the potential of digitalisation by including for
example virtual power plants paves the way for cleaning
up the grid. Digitalisation and information are two of
the main aspects for selecting the most efficient energy
system
system reliability, quality and resource adequacy. At the
same time, the increasing digitalisation requires stepping
• Hydrogen networks important aspect is the need for shifting generation and
load in terms of flexibility instruments, such as demand
• New gases (e.g. H2) side management, RES curtailment and the usage of
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
Indeed, although electricity is at the heart of be to decide on the best technology to be developed.
decarbonisation, the role of renewable and low-carbon But, in order to overcome potential barriers, we must
gases is also recognised, and it will be through promoting define the regulatory conditions that would allow
synergies in the overall energy system that it will be the most cost-effective solutions to be developed in
possible to achieve the agreed targets. Considering that a technology neutral manner. As a starting point, we
significant additional quantities of RES-electricity will believe that investment and management of power-to-
be needed, these gases may be used as one of several gas installations should be considered as market-based
flexibility instruments for different purposes and provide activities, which are open to competition among market
different services, such as for storage in relation to volatile players. Thus, the regulatory treatment for all installations
RES generation and its possible curtailment. The door should be fair and the market should select the most
is open to new actors and new technologies, requiring efficient solutions. At the same time, it is important to
a careful adaptation and oversight of markets and provide certainty to potential investors, while ensuring
regulation. Additionally, the declining need for natural gas that basic market principles are respected.
raises the issue of conducting any regulatory assessment
of new infrastructure with utmost care, excluding For example, power-to-gas installations and their suitable
potential sunk costs and utilising existing infrastructure locations should be taken into account in system needs
in the most efficient way (e.g. by system integration or analysis. Equally, network tariffs should not be used to
smartening the network). In this integrated context, CEER subsidise technologies, activities or users and should
notes the relevance, for example, of revisiting the current provide a level playing field for comparable activities in
established electricity and gas definitions, with respect to the context of an integrated energy system.
the efficient use of their respective networks.
These considerations reinforce the importance of a whole
As regulators, we must closely follow the debate and the system approach for planning, operating and regulating
developments while identifying and overcoming any an increasingly integrated energy system. Moreover,
possible barriers that these recent updates may cause. It given the close interlinkages to other sectors energy
is important to allow the emergence of new actors while system integration goes beyond the energy system. It
ensuring a dynamic regulatory approach. For example, also includes, for example, district heating, which also
hydrogen is considered as one of the main new actors that poses regulatory challenges for energy regulators, such
will actively contribute to delivering decarbonisation. The as in regard to the regulatory regime that serves the
need for regulatory intervention for hydrogen network consumer and other users best. Such challenges need to
infrastructure will depend on how the hydrogen sector be addressed jointly.
will evolve, including the need for transport of hydrogen.
Thus, it will be of the utmost relevance that regulators
provide a clear framework to support the development
and integration of these installations. Regulators must
promote the technical, regulatory and market conditions
that enable hydrogen’s future integration into the energy
system. As we monitor how the hydrogen sector develops,
we recommend adopting a gradual approach to its
regulation, in line with the core principles of economic
regulation of natural monopolies and markets.
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4.2 existing grid before reinforcement and expansion. In this
SUSTAINABLE regard, the benchmarking of the efficiency of networks
continues to be relevant and might even become more
AND EFFICIENT important. Additionally, infrastructure assessment by
the regulators should be performed on the basis of a
INFRASTRUCTURE consistent, monetised and cross-sectoral cost-benefit
analysis.
This expanded view of the energy system naturally An integrated and decentralised renewable energy
brings with it major challenges for existing and system with a large number of diversified actors creates
future infrastructure decisions. The current roles and new challenges regarding system resilience, quality of
responsibilities have to be reviewed. An effective supply and grid management. The traditional tools and
regulatory framework at EU level is needed to ensure a methods being adopted have to be enhanced in order
level playing field for new solutions 1 removing barriers to to ensure an efficient integrated grid management with
entry. distributed cross sector energy resources managed in an
environment with increase uncertainty.
The Clean Energy for All Europeans package (CEP) has
introduced several improvements in the network code Delivering on the objectives of the Energy Union and of
governance for the electricity sector, which should now the Green Deal will require major investments in networks
be extended to an integrated reality (including natural in the coming years. CEER considers that there is room
gas heating/cooling, mobility and other sectors). and need for further improving the efficiency of energy
network planning and development.
Efficient functioning of the European market is one of
the fundamental objectives of NRAs. Reaching optimal
efficiency of the market requires all segments of the
market, operation and infrastructure development to
Sustainable
and efficient
run efficiently. For what concerns the infrastructure
development, it includes the deployment of any solution
that may allow an optimal and efficient utilisation of
the existing network. Such technologies should be
infrastrusture
able to provide new services and optimised processes,
in the context of the efficient operation of the system, • Technology neutrality
enhancing stability and security and, at the same time,
reducing energy costs. More generally, the focus is on • Innovative and advanced solutions
any solution or improvement at the utilisation of existing
infrastructure that creates value to the consumer.
• Sustainable finance
• Efficient grid management
In order to do so for infrastructure decision making the
principle of technological neutrality should be applied
• Integrated planning
with utmost attention. CEER believes that infrastructure • Investment certainty
development should start with jointly developed,
balanced and integrated scenarios used for planning
purposes and a methodology for the identification of
system needs that does not favour any specific solution.
Another important aspect is to have an infrastructure 1
For example: production of electricity from solar PV and wind power,
transport and distribution of electricity in a system that is in a trajectory
planning process that enables the facilitation of meeting of decarbonisation, storage of electricity, storage of hydrogen, retrofit of
system needs cross-sectoral and without inherent bias gas transmission and distribution networks whose main purpose is the
integration of hydrogen and other low-carbon gases, infrastructure for
towards CAPEX-intensive solutions, i.e. promotion of low carbon land transport such as electric charging points, electricity
innovative and advanced solutions to efficiently utilise the grid connection upgrades, hydrogen fuelling stations, among others.
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The transformation of EU energy markets to tackle climate Realising the multi-dimensional and interwoven nature of
change will require profound changes to our economy. It the many issues that lie ahead for the energy system and
will significantly influence the way we use and interact for consumers, CEER has grouped consumer issues under
with energy in our everyday life, such as to heat and cool two core areas, which will be addressed in more detail
our homes, cook our food and fuel our cars, and the way below:
in which we engage with energy markets. • Consumer-centric design; and
• Decentralised and local energy.
Empowered and protected energy consumers, as well
as well-functioning retail markets that bring benefits to These core areas must be seen alongside and in conjunction
consumers, have been a major priority for CEER for many with the other core areas in our Strategy, for example, the core
years. The green transition will create new opportunities areas on delivering well-functioning markets and enabling
and challenges for Europe’s energy consumers and will flexibility, both of which are instrumental in ensuring that
therefore remain a very important policy area for CEER in an integrated and decarbonised energy system works to the
the years to come. benefit of consumers and society overall.
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
centric
privacy) are promoted and protected, whilst delivering on
the EU’s sustainability and climate neutrality objectives,
design is a key priority for the CEER-BEUC 2030 Vision for Energy
Consumers 2 and as such is an integral part of CEER’s
Strategy from 2022 and onwards.
• LET’S ASPIRE principles
The CEER-BEUC Vision sets out six core principles, striving
• Consumer rights and protection for a “Long-term Energy Transition for Sustainability and
• Energy efficiency climate neutrality: Affordability, Simplicity, Protection,
Inclusiveness, Reliability and Empowerment”. In short,
• Consumer groups we call this “LET’S ASPIRE”. These principles are valid
• Energy poverty and vulnerability for all consumers, be they electricity, gas or heating
consumers. Furthermore, it is important to safeguard
• Data management the rights of all these customers as we proceed with the
energy transition, also recognising that in the medium
term, many households and consumers across Europe will
continue to use gas for their everyday needs.
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CEER-BEUC 2030 Vision for Energy Consumers, published October 2020.
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AFFORDABILITY highlights the importance of correct RELIABILITY stresses that energy supply is an essential
price signals reaching consumers, but also that it is service of general economic interest and that it is
important that consumers can reap the benefits of energy therefore essential that energy suppliers are aware of
efficiency. It also states that network charges and costs their responsibilities and obligations and act accordingly.
related to the transition must be distributed fairly among Consumers should also have access to reliable and secure
all users. Finally, the principle stresses the importance of energy supply. Commercial systems and processes, for
making distributional impact assessments of planned example billing, should be dependable, and disputes
policies to ensure that such policies do not increase the resolved transparently, fairly and quickly. The principle
burdens on vulnerable consumers and the energy poor. also highlights the importance of consumer trust.
INCLUSIVENESS highlights that policy makers need to PROTECTION focuses on the importance of fit-
ensure that new policies are inclusive and do not increase for-purpose consumer protection legislation, both
gaps between consumers, especially the more vulnerable. sector-specific and general, against unfair commercial
The possibility to reduce energy bills should be a special practices, and the possibility to get redress if necessary.
focus for energy policy makers. Inclusiveness also includes It also highlights the importance of data protection and
not creating new societal divisions as markets become cybersecurity in a consumer context. Finally, it refers
more digitalised. Finally, the principle sets out that it is to the importance of crisis management if unexpected
important that consumers can become an integrated part events occur, for example a pandemic like Covid-19.
of the transition themselves.
EMPOWERMENT states that the same level of
SIMPLICITY underlines the need for clear, trustworthy protection should be enjoyed by consumers regardless
and easy to understand information, including bills, in of whether they have a traditional supplier or rely on
order for consumers to compare offers and to become new energy services, regardless of company. According
an integrated part of the transition. The principle also to this principle, consumers should also be able to easily
highlights the importance of consumers getting clear and contribute to the transition by producing and selling
reliable advice on how to use energy sustainably to satisfy their own electricity and by taking part in demand-side
their needs. response schemes, etc. In this context, correct price
signals and low thresholds to enter the market are
important.
Looking ahead to 2030 and the EU’s 2050 sustainability and order to be effective. Transforming the Vision’s principles
climate neutrality objectives, we envision a future where into action is a long-term goal and will require systematic
effective policies and frameworks ensure that consumer work from many parties, including governments, industry,
rights are promoted and protected, whilst delivering regulators, consumer bodies, and authorities. This is why
these objectives. This is at the heart of the 2030 Vision and the LET’S ASPIRE principles form the strategic basis for
addressed by the LET’S ASPIRE principles. CEER’s 2022-2025 Strategy. Our regulatory activities across
all areas will contribute to advancing the implementation
Thus, the six principles and the areas highlighted under of the principles and making them a reality for consumers,
each principle provide a high-level steer. Each principle will empowering them for the energy transition.
require further work from CEER and other stakeholders in
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
5.2
DECENTRALISED
and the transition. For example, they can support system
operation by providing flexibility services locally and
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Ensuring well-functioning
markets delivering
flexibility
Sustainable consumption and production is a fundamental particularly by ensuring that vulnerable consumers are not
objective and decentralised (or distributed) energy disadvantaged or overlooked.”
will have a key role to play in achieving this ambition.
Making the energy system on all levels more flexible to With that in mind, CEER has identified two core areas for
cope with an increasing share of intermittent renewable this work, which will be addressed in more detail below:
generation requires a market-based approach, i.e. setting • Well-functioning markets, recalling the main principles
the regulatory framework in such a way that it enables of markets open to competition; and
markets to work properly and competition, thus ensuring • Flexibility, looking at the distribution level in particular.
efficient price signals are sent to suppliers and users alike.
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The expected drop in natural gas demand will coincide flexibility, aggregators, industrial users, prosumers and
with a drive to move from conventional to decarbonised active consumers.
and renewable gases. This is primarily driven by the strict
carbon emission reductions endorsed by the EU. Despite
the predictable rise of electrification in the energy system, 6.2
FLEXIBILITY
gas still has a role to play and will certainly be a motor to
ensure decarbonisation and security of supply at least cost.
The emergence of green gases will be considered, and they
should be integrated into the existing gas market, with a Following the CEP we need to organise electricity markets
full valuation of their environmental benefits and captured in a more flexible manner and to fully integrate all market
in market monitoring through sustainability indicators players in decentralised markets – including producers of
published alongside Gas Target Model (GTM) metrics. renewable energy and providers of new energy services,
energy storage and flexible demand. This also requires
the modernisation of distribution networks and their
development into smart grids in order to encourage
Well- decentralised generation and energy efficiency, in other
• Future market evolution DSOs as neutral market facilitators, but clearly, competitive
activities should be left to the market and unbundling
principles respected 4 .
Despite the continuous role of electricity and gas, it will be
crucial to expand our outlook into an integrated system An assessment will have to be done on how decentralised
where other energy vectors may be included. Circularity energy offers the opportunity to reduce the carbon
will be the key to achieve decarbonisation targets and as intensity of energy use and increases resource efficiency
regulators, we will contribute to that end. use to help improve environmental sustainability. Energy
users would then benefit from increased energy security
Market design must ensure that all forms of energy – supply and of course an increasing uptake of decentralised
and demand; centralised or decentralised; large-scale and energy should create new business models.
micro-production – are able to compete on equal terms
in the market. All actors should be compensated fairly for Decentralised energy will cover a wide range of
the benefits they bring to the system and, conversely, bear technologies and brings a range of business benefits e.g.
the costs of the constraints or costs that they generate. increased conversion efficiency (reduced transmission
losses); increased use of renewables, more flexibility for
Any barriers to market entry and participation must generation to match local demand patterns for electricity;
be removed, whilst ensuring a level playing field for all and greater energy security for businesses that control
energy actors and types of activities, be they on the their own generation.
demand or the supply side. Indeed, these binary concepts
will become increasingly blurred in an integrated energy 4
See the CEER Conclusions Paper on New Services and DSO
system with decentralised and local energy, storage, Involvement, Ref. C18-DS-46-08, 22 March 2019.
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Significant changes in the European energy system On a European level, CEER recommends the following
over the last decade have been driven by an increased principles for all kinds of market-based flexibility
deployment of intermittent renewable generation, procurement by DSOs: balanced incentives, adequate
decarbonisation and digitalisation. One way of neutrality, technical prerequisites and an overall
managing these changes and ensuring secure system framework for procurement. The framework needs to
operation is through improving system flexibility. clearly allocate rights, duties and responsibilities for the
The topic of flexibility is of increasing interest and participating actors alongside securing availability of
importance across the entire energy value chain and flexibility, while giving room for development. However,
in CEER’s view, a holistic approach and view are concrete implementation remains to be decided at a
necessary in the coming years. national level. A framework for market-based flexibility
should at least include descriptions on product design,
technical rules, a method to cope with imbalances
caused by activations, tendering procedures, market
model design and coordination schemes between
system operators. NRAs have an important task in the
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Council of European Energy Regulators I EMPOWERING CONSUMERS FOR THE ENERGY TRANSITION
in the medium and long term. The obligation and DSOs will need flexibility in the future, and they need
process to create the network development plans should services based on location of flexibility and the situation
incorporate designs to enable a good compromise in their network. CEER would like to see, after appropriate
between effort and benefit. national experiments, the development of a common
architecture in marked-based flexibility and incentives.
Market-based flexibility should be based on a level playing This could provide guidance and market signals to link
field and open to all forms of flexibility, including assets different flexibility platforms and market-places, so
from other sectors like heat and gas. To develop systems that different market participants and consumers could
to an optimal point in terms of the utilisation of flexibility, operate in a transparent and non-discriminatory manner.
more detailed analysis is needed. This will, also, improve the coordination between TSOs
and DSOs in avoiding cascading effects in using flexibility
This includes how markets interact, flexibility valuation in one market to another market.
methods and how coordination schemes should be
carried out in practice, to gain experience and allow CEER will continue to provide guidance on the market test
for optimisation in the interest of the end consumer. for flexibility and storage, which is a requirement if DSOs
Furthermore, the interaction with other new actors like want to own storage. In this guidance CEER will include
aggregators or energy communities needs to be observed a discussion on flexibility platforms and effective price-
and analysed. signals, providing clarity and guidance.
CEER considers market-based flexibility as one very Further to this, CEER already has identified some upcoming
important option, which could allow for a substantial challenges that we will have to cope with:
benefit in the distribution grid; contributing to its • Reassess distribution tariffs; the presence of several
further development to support as renewable, reliable active network users scattered across the network
and efficient an energy supply as possible. This is increases the complexity in local network use and may
especially salient when considering the integration of require adjustments to the tariff structure (dynamic
fluctuating renewables, electrification of industry and tariffs need local granularity); and
the further growth of appliances that increase demand • Take care of increasingly decentralised gas production;
like e-mobility, heat pumps and home storage. A careful local congestions, need for countries that will replace
design and assessment of efficiency is critical, where all natural gas with hydrogen to adapt and/or replace
necessary prerequisites for a market-based approach gas infrastructure, which requires coordinated actions
must be respected, imposing regulatory measures if/when between DSOs and TSOs.
necessary. It could also be beneficial to test some relevant
aspects based on settings in regulatory sandboxes, where
interactions between market functioning and scaling
should be taken into account.
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7
Conclusions and
implementation
In the above chapters we have outlined the Regulation and markets go hand in hand and the
megatrends shaping the environment for our regulatory tools must be used flexibly in a way
regulation in the future. At the same time, we are also that fast evolving markets deliver on the above-
acting in a given framework of liberalised markets mentioned targets for the benefit of all consumers
that provides the legal basis for all our actions. who should be empowered to actively participate
Pulling together these two realities, the main trend in and contribute to the energy transition while at
influencing our work as energy regulators is climate the same time taking care that no one is left behind.
change and the policies and actions necessary to
ensure we reach a climate neutral economy and The fast-moving markets are driven by innovation
society. and new technologies and require us to adapt
our regulation in a way that balances the tension
Therefore, energy regulators are committed to between achieving regulatory goals without
empowering consumers to participate in the energy discouraging innovation. The need to trial innovative
transition to thereby promote it and to enable energy solutions for a future integrated energy system must
system integration as a major building block to be based on renewable energy, energy efficiency,
achieve the overarching targets of decarbonisation, decarbonisation and be highly digitalised. They
climate neutrality, sustainability and efficiency as will be aligned with the principles of consumer
spelled out in the Green Deal and other initiatives empowerment in this evolving process which is key
of the European Commission. The centrepiece of the to support innovation.
new CEER Strategy is the consumer centric dynamic
regulation. We incorporated the ASPIRE principles of The concept to do this is dynamic regulation with
the 2030 BEUC/CEER Vision into our Strategy placing which we aim to unlock flexible solutions while
the consumer at the centre of all regulatory activities. relying at the same time on well-proven fundamental
regulatory principles, in particular predictability.
With this in mind we will focus all our regulatory tools Regulation must be stable but never static.
to enable energy system integration through Regulators commit to apply dynamic regulation in a
pursuing an innovative and flexible whole system way that supports the energy transition.
approach involving all actors whose roles will more
and more converge in the changing environment.
About CEER
The Council of European Energy Regulators (CEER) is In terms of policy, CEER actively promotes an investment
the voice of Europe’s national energy regulators. CEER’s friendly, harmonised regulatory environment and the
members and observers comprise 39 national energy consistent application of existing EU legislation. A key
regulatory authorities (NRAs) from across Europe. objective of CEER is to facilitate the creation of a single,
competitive, efficient and sustainable Internal Energy
CEER is legally established as a not-for-profit association Market in Europe that works in the consumer interest.
under Belgian law, with a small Secretariat based in
Brussels to assist the organisation. Specifically, CEER deals with a range of energy regulatory
issues including wholesale and retail markets; consumer
CEER supports its NRA members/observers in their issues; distribution networks; smart grids; flexibility;
responsibilities, sharing experience and developing sustainability; and international cooperation.
regulatory capacity and best practices. It does so by
facilitating expert working group meetings, hosting CEER wishes to thank in particular its Strategy Steering
workshops and events, supporting the development Group for their work in preparing this document.
and publication of regulatory papers, and through an in-
house Training Academy. Through CEER, European NRAs More information is available at www.ceer.eu
cooperate and develop common position papers, advice
and forward-thinking recommendations to improve the
electricity and gas markets for the benefit of consumers
and businesses.
Ref: C21-SSG-06-05
10 June 2021
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Belgium
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