Fsr Energy & Climate

After attending a conference jointly organised by Eurelectric and the Florence School of Regulation on the electricity market design of the future, Pradyumna Bhagwat (FSR) and Nicolò Rossetto (FSR) summarise their main takeaways. First, thinking out of the box is fundamental. We live in transformative times and electricity markets must be able to manage uncertainty and adapt to new, unpredictable conditions. Second, the European Commission and the electricity industry believe in the strong role free markets can play but have a different view on what those markets should look like. On the one side, scarcity pricing may scare policy-makers and investors, while on the other, capacity mechanisms may distort the internal market and hinder integration. Convergence of opinions between the industry, the Commission and most of the academics is more apparent on the need to engage consumers, foster flexibility and the breakthrough that turning reliability into a private good could represent. Finally, the parallel sessio