MEPs have approved reforms for a more sustainable and resilient energy market.

The plans are designed to help facilitate the uptake of renewable and low-carbon gases, including hydrogen, into the EU gas market, to protect consumers against volatile electricity prices, secure energy supplies disrupted by geopolitical tensions, particularly the Russian war against Ukraine, and address climate change.

In the electricity market the new rules will ensure that consumers will have the right to access fixed-price contracts or dynamic price contracts and receive important information on the options they sign up to. Suppliers will not be allowed to unilaterally change the terms of a contract. MEPs also secured that EU countries can prohibit suppliers from cutting the electricity supply of vulnerable customers, including during disputes between suppliers and customers.

The legislation provides for so-called “Contracts for Difference” (CfDs), or equivalent schemes with the same effects, to encourage energy investment. In a CfD, a public authority compensates the energy producer if market prices fall too steeply, but it collects payments from them if prices are too high. The use of CfDs will be allowed in all investments in new electricity production, whether from renewable or nuclear energy.

The gas reforms will also focus on increasing investments in hydrogen infrastructure, especially in coal regions, promoting a transition to sustainable energy sources like biomethane and low-carbon hydrogen.

Lead MEP on the regulation Jerzy Buzek said: "The new regulation will transform the current energy market into one based primarily on two sources - green electricity and green gases. This is a huge step towards meeting the EU's ambitious climate goals and making the EU more competitive on global markets. We have introduced a legal option for EU countries to stop importing gas from Russia if there is a security threat, which gives them a tool to phase out our dependence on a dangerous monopolist."

The text also sets out a mechanism to declare an electricity price crisis. In a situation of very high prices and under certain conditions, the EU may declare a regional or EU-wide electricity price crisis, allowing member states to take temporary measures to set electricity prices for SMEs and energy intensive industrial consumers.

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