On 17 July 2026, the European Commission published a proposal to amend Regulation (EU) 2019/943 on the internal electricity market, aiming to reduce system costs, accelerate electrification and digitalisation, and lower electricity bills for households and businesses. The proposal introduces mandatory smart meter deployment targets, new rules for network charges that incentivise flexibility and non-wire solutions, and provisions to ensure electricity taxation is lower than that on natural gas.
The document, adopted by the Energy Directorate-General (ENER) as COM(2026)600, is a legislative proposal that will now be debated by the European Parliament and the Council. It targets several structural drivers of high electricity costs: network tariffs that do not reward flexible consumption, slow rollout of smart meters, tax regimes that favour fossil gas over electricity, and unclear grid connection prioritisation.
Under the proposal, network charges must be designed to encourage system operators to use flexibility, smart grids, and non-wire alternatives, while grid users should be incentivised to shift consumption to periods when electricity is cheaper and the system is less strained. Special cost-reflective network charge regimes are allowed for energy-intensive industries and data centres, but with safeguards to protect households and small and medium-sized enterprises from disproportionate cost shifts.
A key numerical target is the mandatory deployment of smart meters: by 2030, at least 50% of final customers in each Member State must have smart meters, rising to 75% by 2033. Member States with deployment below 30% at the time the regulation enters into force may receive a deadline extension for the 50% target. The Commission argues that smart meters enable dynamic pricing, demand response, and better integration of renewables, ultimately lowering system costs.
On taxation, the proposal requires that electricity taxation be lower than natural gas taxation, reversing what the Commission describes as a long-standing anomaly that discouraged electrification. Member States may further reduce electricity taxes for energy-intensive industries, a move likely to benefit manufacturing sectors but potentially reduce tax revenues for national budgets.
national regulatory authorities may prioritise connections based on project maturity, progress, congestion impact, or economic, social, or environmental criteria. However, they must first ensure that other congestion management measures—such as flexible connection agreements or non-wire solutions—are in place before applying prioritisation.
The proposal represents a significant regulatory intervention in electricity markets, with direct impacts on several stakeholder groups. For EU consumers and households, the expected outcome is lower bills through reduced network costs and smarter consumption patterns, though the upfront cost of smart meter rollout may be passed through in network tariffs. Energy-intensive industries and data centres gain access to tailored network charges and potential tax reductions, improving their competitiveness. EU electricity system operators and distribution system operators face new obligations to adopt flexibility and non-wire solutions, requiring investment in digitalisation and grid management capabilities. National regulatory authorities gain new tools for grid connection prioritisation but must also enforce the new network charge design principles, which may require capacity building.
The institutional follow-up will see the European Parliament's Industry, Research and Energy (ITRE) committee take the lead, with the Council's Energy Working Party expected to begin examination in autumn 2026. The proposal is likely to generate debate between Member States with high smart meter penetration and those lagging behind, as well as between industries seeking lower charges and consumer groups wary of cost shifting.