Eurelectric Warns Brussels Network Charge Plan Would Distort EU Power Markets
The bloc's main power industry lobby says the European Commission's proposed tariff cuts, designed to offset Iran war energy costs, risk undermining competitive wholesale price signals.
Eurelectric formally objected on Thursday (2026-09-17) to European Commission proposals that would reduce electricity network charges across the EU, warning the measure risks distorting the bloc's internal wholesale power market. The Commission designed the plan to cushion consumers against energy price increases driven by the Iran war.5
The power industry lobby's concern is that the proposal goes beyond targeted consumer relief. Network tariffs are a regulated cost layer on top of wholesale electricity prices, and altering them under emergency conditions without corresponding adjustments to market rules can suppress the price signals that generators and traders use to make dispatch and investment decisions.5
The disparity in market exposure across Europe sharpens that concern. Gas plants set the marginal power price in 89% of European market hours so far in 2026, according to Ember, the think-tank. Spain was an outlier at 15%. That difference in generation mix produced a March price gap of €142 per MWh in Italy versus €59 in Spain, Ember shows. A blanket network charge reduction interacts with those gaps differently in each national market.3
Day-ahead prices on Monday (2026-09-21) showed the divergence is still wide. German power cleared at €161.21/MWh while French day-ahead settled at €105.71/MWh and Swiss at €159.71/MWh in the same session, with Dutch day-ahead at €118.17/MWh and Belgian at €117.29/MWh. The spread makes the distortion profile difficult to contain under any uniform tariff measure.5
ICE Endex TTF front-month fell 7.87% to €73.27/MWh on Monday (2026-09-21), with THE M+1 shedding 8.23% to €74.06/MWh in the same session. Even after that pullback, gas prices remain elevated enough to keep gas-fired plants near the top of the merit order across most of continental Europe outside the Iberian peninsula.3
The Iran war's effect on European energy markets was already acute in its early months. EEX reported on Wednesday (2026-05-20) that gas derivatives trading had surged 62%, with 1,721 TWh of European gas derivatives traded in the first three months of 2026. Power derivatives volumes rose 29% to 3,238 TWh over the same period, EEX said, while spot market volumes grew 9% to 972 TWh.1
Those numbers reflect how quickly European energy markets became sensitive to gas price swings once fighting began. Any measure that suppresses the wholesale price signal, as Eurelectric argues the network charge plan would, erodes the benchmark that hedgers and generators use to manage that exposure.5,1
The Commission's logic is not hard to follow. Network charges make up around 20% of household electricity bills, Christoph Maurer of Consentec estimates, making them a visible and politically manageable lever during a period of elevated costs. Reducing them does not require rewriting wholesale market rules.3
But Eurelectric's concern is that speed at the policy level can produce lasting distortions at the market level. Analysts cut their EU carbon price forecasts sharply on Thursday (2026-04-30), citing uncertainty over proposed policy changes, Reuters reported — one illustration of how quickly proposed interventions can move pricing in adjacent instruments. The lobby's objection now sits inside the parliamentary and council process that will shape the final rules.5,4
Wood Mackenzie warned in May 2026 that a prolonged Iran conflict could have severe impacts on the global LNG market, adding a deeper supply risk beneath the gas price exposure that already drives European power pricing. If the network charge rules embed the distortions Eurelectric is warning about while gas remains the dominant marginal fuel, unwinding them later requires a Commission with considerably more political space than it currently has.2,5