A declaration has been issued by signatories including EWEA, SolarPower Europe, the European Engine Power Plants Assocation and the European Association for Storage of Energy.
Only a flexible and dynamic energy system, making the best use of innovative and distributed supply and demand options, can ensure a cost-efficient and sustainable transition towards a decarbonised energy system, believe the signatories.
The groups have identified three key areas of reform to be addressed by the EU:
To supply greater price signalling and integration of short-term markets across borders;
To give a balanced approach to system adequacy taking into account the contribution of renewables; and
To implement a level playing field for grid-balancing providers.
The current pre-qualification requirements for grid balancing are prohibitive, they believe.
EWEA CEO Giles Dickson said: "Europe must rewrite the rules governing electricity markets so they fit the reality of how power is generated, managed and consumed in today's energy system. Supply is getting more flexible and variable. Storage solutions are developing. And there's growing scope and interest in making demand more flexible.
"The energy system is now more complex to plan, control and balance. It needs enhanced flexibility, which requires significant changes in the relevant legislation. The Commission has a golden opportunity with the market design proposals they'll issue at the end of the year. They must seize it," Dickson added.