Electricity: The EU is ready to intervene to prevent price increases – 08/29/2022 at 19:00

The EU has announced an emergency intervention in the electricity market to limit the bills of Europeans, and is working on structural reform to prevent rising prices (AFP / John MACDOUGALL)

The EU announced on Monday that it is preparing “an emergency intervention” in the electricity market to limit the bills of Europeans, and is working on “a structural reform” to prevent rising prices, under pressure from Member States.

Such a reform of the common electricity market, demanded for a long time in France but which divides the Twenty-seven, will be on the menu on September 9 in Brussels at a meeting of the EU energy ministers, which the suggestion of some should also be considered. States a price cap.

“The rising price of electricity clearly shows the limits of the current functioning of the market. It was designed in a very different context”, admitted Ursula von der Leyen, the President of the European Commission, during a conference in Bled (Slovenia).

“That is why we are now working on emergency intervention and structural change in the market”, where electricity prices are closely linked to gas prices, he added, without further details.

The date of September 9 was announced on Monday by Czech Industry Minister Jozef Sikela, whose country holds the rotating EU presidency. “We need to fix the energy market. A solution at the EU level is the best,” he tweeted.

Speaking with him at a press conference in Prague, German Chancellor Olaf Scholz also called on member states to agree “quickly” and in a “coordinated way” on a reform. The current system “cannot be described as working normally if it leads to such high electricity prices”, he criticized.

But as a reform will take time, Prague immediately proposed “a cap on the price of gas intended to produce electricity”. “This is an effective and less expensive solution that should reduce prices” for consumers, argues Mr Sikela.

A proposal supported by Belgium: “Currently, electricity is produced at a much lower price than the price at which electricity and gas are sold”, which justifies “action at the source, by freezing the price, a cap at the European level,” Belgian. Energy Minister Tinne Van der Straeten said on Sunday.

Only two member states, Spain and Portugal, have the green light from Brussels to deviate from EU rules by imposing a cap on energy prices, due to their weak connection to energy networks. Europe.

– “An idiot”-

Calls to reform the common electricity market have grown as, after six months of war in Ukraine, energy prices have risen to stratospheric levels, raising fears of a winter cost blowout. in the next life.

In the European market, it is the cost price of the final source of electricity mobilized to meet demand, usually gas-fired power stations, which determines the price imposed by all operators on the continent. This price rose in concert with the surge in gas prices linked to the sharp reduction in Russian gas supplies to Europe.

On Sunday, Austrian Chancellor Karl Nehammer called on the EU to “decouple the price of electricity from gas” to “stop this nonsense”.

This decoupling is demanded by Paris, which believes that French consumers are penalized, prevented from fully benefiting from the low cost of nuclear power through a mechanism that is considered “outdated”.

“I hope we can go to the end of this dynamic and really have the electricity market protected from the elements of speculation (…) our countries are now victims of a price formula and assumptions that are not which corresponds to the truth,” French President Emmanuel Macron reaffirmed on Monday.

Paris, supported by Madrid, put the topic on the table last fall when gas prices were already rising, boosted by the post-Covid economic recovery.

However, in a joint declaration published in October 2021, nine Member States, including Germany, strongly oppose any reform of the electricity market, judging the current system to be effective in “contributing to innovation” and “accelerating the transition” to green energy. .

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