Drawbacks of introducing peak-shaving products under normal market conditions outweigh potential benefits
Drawbacks of introducing peak-shaving products under normal market conditions outweigh potential benefits
What is it about?
Following a consultation process launched in March 2025, ACER has concluded that implementing peak-shaving products in the EU electricity market under normal conditions would bring more challenges than advantages.
What are peak-shaving products?
Peak-shaving products are market-based tools that enable market participants to reduce their electricity consumption (during peak demand periods) in exchange for compensation.
Under the 2024 Electricity Market Design (EMD) Regulation, the Council of the EU can declare a regional or EU-wide crisis if wholesale electricity prices become excessively high. In such cases, Member States can direct system operators to use peak-shaving products to reduce power demand, helping stabilise the grid and lower prices.
Why an ACER assessment?
The EMD Regulation mandates ACER to assess the potential impact of developing peak-shaving products on Europe’s electricity market under normal (e.g. non-crisis) conditions. ACER’s assessment evaluates whether these products can be introduced without disrupting the normal functioning of electricity markets or redirecting demand response services towards peak-shaving products.
To strengthen its assessment, ACER engaged with more than 40 stakeholders, including through an Expert Group and a public consultation (spring 2025).
What are ACER’s conclusions?
ACER’s assessment shows that the drawbacks of introducing peak-shaving products in the EU electricity market under normal conditions outweigh the potential benefits. Therefore, ACER does not recommend amending the existing legal framework to allow their use outside of electricity price crisis situations. Key concerns identified include:
- reduced overall socio-economic benefits;
- distorted cross-border competition; and
- weakened investment incentives for market-based demand response and flexibility.
In its assessment, ACER also provides recommendations to support Members States in implementing peak-shaving products during electricity price crises. These recommendations aim to enhance the products’ effectiveness and minimise any unintended consequences.
What’s next?
Based on ACER’s assessment, the European Commission will decide whether to propose amendments to the Electricity Regulation to allow peak-shaving products outside of electricity price crisis situations.