The electricity market in Europe is about to undergo a historic reform that will directly affect the wholesale electricity market, known as the electricity pool. The European Commission, led by Ursula von der Leyen, is expected to unveil its final proposal this week. For more than three decades, the electricity pool has been the foundation of the light market, but the uncontrolled energy prices resulting from Russia's war against Ukraine have demonstrated its inefficiency.

The reform of the electricity market has generated great anticipation throughout the sector. The consultation carried out by the European Commission has received a record number of contributions, with a total of 1,350 until the deadline for submitting allegations. Of all these contributions, 53 have been from Spain, a country that has played a leading role in the entire process.

The Spanish government presented a reform proposal that has created a huge stir, both domestically and in Europe. The Spanish plan proposes an almost complete replacement of the pool with a more interventionist price system, which includes the massive introduction of Contracts for Difference (CfDs), regulated prices for nuclear and hydroelectric power, and capacity contracts.

This reform will have a huge impact on electric companies, as the pool is the basis of their activity, and any adjustment will have a great impact. The wholesale market is where contracts for the purchase and sale of electricity between producers and marketers are negotiated. It operates with a marginalist model that matches supply and demand with rising prices until all light needs are met. The last power plant that enters the market (the most expensive) is the one that sets the price for all the others, which has generated criticism and controversy.

The impact of the reform of the electricity market in Europe on renewable energies will largely depend on the details of the European Commission's final proposal and how member states implement the proposed changes. However, the reform is likely to have significant implications. In general, the reform of the electricity market is expected to promote greater participation of renewable energies in the market, as it involves the introduction of Contracts for Difference (CfDs) and other incentive mechanisms for these technologies. CfDs allow renewable energy producers to secure a fixed long-term price for their energy, reducing the financial risk associated with investing in renewable energy projects. Therefore, this could attract more investments in renewable energies and increase their market share.

In addition, the reform could also include measures to improve the integration of renewable energies into the electrical system, such as greater coordination between renewable energy and capacity markets, which could increase the reliability and efficiency of the system. However, the reform may also have some negative implications for renewable energies, especially in terms of how prices and contracts are structured. For example, if CfDs are introduced through controlled downward auctions by a regulatory body, it could reduce the prices that renewable energy producers can get for their energy and therefore reduce their profitability.

In conclusion, the reform of the electricity market in Europe is a crucial step in ensuring the efficiency and competitiveness of the energy sector on the continent. Despite criticisms and debate over the degree of interventionism, the reform proposed by the European Commission is expected to allow greater stability and control in electricity prices, and overall this will be something that benefits renewable energies.