COM(2026)850 Retail Flexibility Report

Report from the Commission to the Council and the European Parliament, COM(2026) 850 final, Brussels, 30 April 2026 — On market-based electricity supply prices, effective retail market competition and promoting remuneration of flexibility in retail contracts.

Issued under Article 5(10) of Directive (EU) 2019/944, which obliges the Commission to report on the implementation of Art. 5 (market-based supply prices and public price interventions). The flexibility half responds to the Affordable Energy Action Plan (COM(2025) 79).

Not the EMD reform review. This is easy to mistake for the review of Regulation (EU) 2024/1747 due 30 June 2026, which remained unpublished as of August 2026. Different legal basis, different subject.

Chapter 1 — market-based supply prices

Assesses price-setting across member states since the Electricity Directive entered into force in July 2019, drawing on Art. 5(9) member-state reports (most submitted by 31 March 2025), ACER analysis, Eurostat and desk research.

Sweden is one of only three member states — with Slovenia and Latvia — reporting no identifiable barriers to competition in its retail market.

Conclusion of the chapter: competitive conditions have improved somewhat since 2019, especially where there is no price regulation, but significant scope for improvement remains. The Commission does not propose new legislation on Art. 5 at this stage, and will instead keep implementation under review.

Chapter 2 — flexibility in retail contracts

The substantive half for this wiki. It concerns price-based (implicit) demand response: consumers reacting to time-varying retail prices, as distinct from incentive-based (explicit) demand response delivered through aggregators into balancing and ancillary markets.

Four contract types

• Dynamic price contracts — linked to spot (day-ahead/intraday) prices at intervals at least equal to the settlement period. Suited to consumers with flexible assets (EVs, heat pumps).
• Time-of-use — a limited number of daily price intervals (day/night, peak/off-peak); simpler and more predictable.
• Hybrid contracts — a fixed element blended with a flexible one, for consumers wanting predictability while still capturing some flexibility value.
• Critical peak pricing (CPP) — prices raised substantially during tight periods. Commercial CPP is distinguished from the Art. 7a peak-shaving product, which is a temporary regulated instrument usable only in a declared price crisis.

Key figures

• Up to 40% savings are achievable by switching to a dynamic contract and actively managing consumption (ACER 2025 market monitoring report Rewarding Flexibility plus Commission calculations).
• Dynamic price contracts are available to households in 16 member states, but penetration exceeds 5% in only five: Finland, Latvia, Netherlands, Sweden and Spain.
• Smart metering reached ~60% of EU-27 at end-2024 (ACER-CEER): 15 member states above 80%, of which 10 near-full coverage; 12 below 80%, 7 of those lagging through rollout delays or no deployment decision.
• Network charges are 24% of the average EU electricity bill, a share expected to rise as grid investment increases.

Multiple supply contracts per connection point

The amended Art. 4 of Directive 2019/944 lets a customer hold more than one supply contract simultaneously, via several metering/billing points behind a single connection point — enabled by smart meters or submeters. The report’s worked example splits a household three ways: EV charging on a dynamic or time-of-use contract, the heat pump on time-of-use or hybrid, and base load on a conventional fixed contract.

The stated purpose is to escape the “all-or-nothing” choice that deters households from dynamic pricing: flexible loads get exposed to price signals while the rest of consumption stays shielded. Recital 19 of Directive 2024/1711 grounds this in advances in metering and sub-metering technology.

Interaction with network tariffs

Network charges should be cost-reflective and consistent with flexible retail contracts, per the Commission’s guidance on distribution tariff design. The report cites this same guidance document under two different reference numbers in two places — COM(2025) 4010 (footnoted to the 24%-network-charge-share figure) and its final OJ publication C/2026/126 (9 January 2026, footnoted to the “2025 Guidance on distribution tariff design” language) — both titled Guidelines on future proof network charges for reduced energy system costs, confirmed against Source - C(2026)126 Future Proof Network Charges Guidelines. The report asks member states and regulators to ensure network tariffs carry flexibility signals aligned with retail offers, which requires coordination between regulators, system operators and stakeholders.

Forthcoming instruments named

• The network code on demand response — a common EU framework for activating and remunerating flexibility across markets (legal basis Art. 59(1)(e) of Regulation 2019/943).
• An implementing act on data interoperability for demand response (legal basis Art. 24(2) of Directive 2019/944), complementing Implementing Regulation (EU) 2023/1162 on metering-data access.
• The EU code of conduct for energy smart appliances (JRC), so connected devices can respond to flexible supply contracts without national fragmentation.

Recommendations to member states

Diversify retail products (dynamic, time-of-use, hybrid); enable pilots and regulatory sandboxes for hybrid offers; keep participation voluntary, transparent and tailored, with safeguards for vulnerable and energy-poor customers and protection against aggressive telemarketing into unsuitable dynamic contracts; accelerate smart-meter rollout and enforce data-access interoperability; raise awareness; require suppliers to provide illustrative bill comparisons across dynamic/fixed/time-of-use using historic consumption; require comparison tools to show risk exposure, not only price; promote automation (home energy management, smart thermostats, EV chargers); address digital inclusion; publish profile-based guides including optional “bill-stabiliser” features; and monitor uptake and distributional outcomes under Arts. 11 and 59.

Relevance to this wiki

• Supplies the EU framing for implicit/price-based demand response, complementing the explicit-DR material on Demand Response and Aggregation.
• The multiple-supply-contracts provision is a concrete mechanism for the flexible-load separation discussed on Submetering and in the dedicated measurement device provisions.
• Places Sweden favourably on two comparative measures (no competition barriers; dynamic-contract penetration above 5%) — external corroboration for Swedish Household Demand Response — Consumer Adoption and Barriers.
• Its call for cost-reflective network tariffs coordinated with retail flexibility sits in tension with Ei‘s June 2026 repeal of EIFS 2022:1, which removed the binding effektavgift requirement pending a new model due April 2027.
• The network-charge tariff-design instrument this report names but doesn’t detail — C/2026/126 — is separately ingested as Source - C(2026)126 Future Proof Network Charges Guidelines.

Data gaps

• Whether Sweden’s post-EIFS 2022:1 effektavgift model (due April 2027) will meet this report’s coordination expectation between network tariffs and flexible retail contracts