Fsr Energy & Climate

Given its current carbon intensity, the power industry is particularly sensitive to the reform of the EU Emission Trading Scheme (ETS). Eurelectric, the association representing many of the big players in electricity generation, has a broadly positive view on the reform that has been recently approved by the Council and the European Parliament. Nevertheless, it is interesting to hear that for the largest power producers a price on carbon is not the only important factor that will steer the industry towards full decarbonisation by the middle of the century. Many other issues must be addressed, and the uncertainty that investors are currently facing is particularly important. Investment signals based on long-term electricity purchase agreements could become one of the key pillars of a new market design. Indeed, long-term contracts can efficiently complement short-term flexibility markets and ensure security of supply, decarbonisation and competitiveness for the power sector.