Sunday

4th Jun 2023

EU power price response 'uncoordinated', experts warn

  • High gas prices in Europe are driving up the price of electricity — forcing some government into action (Photo: EUobserver)
Listen to article

With electricity prices at record highs, some European governments have implemented national measures to protect their own domestic households and businesses.

But so far, these have been largely "uncoordinated and have prioritised national security over cooperation," think tank Bruegel warned in a paper published on Tuesday (6 September).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

This could "undermine the goal of calming energy markets," the authors write, adding that "cross-border electricity exchanges are the centrepieces of Europe's energy system."

In June, the Spanish government announced a subsidy scheme for gas and coal-fired power plants.

This has kept electricity bills comparatively low in the country, but since then, gas flows from Spain to France have been 30-percent lower than in the same period last year.

"While such policies may gain the support of voters, isolated power systems tend to result in higher prices for consumers who cannot benefit from cheap electricity from their neighbours," the study's authors, including Bruegel senior fellow Simone Tagliapietra, wrote.

The paper instead encourages member states to strike a "grand energy bargain" together to solve the crisis and not move alone. Power-sharing and bringing down demand should be central to such a plan, they write.

The European Commission is currently working on a plan to reform of the electricity market, but the plan is not ready yet.

Meanwhile, European energy ministers are set to meet in Prague on Friday. But, according to an EU diplomat speaking on the basis of anonymity, it is "unlikely" ministers there will agree on a single EU-wide plan.

EU plans 'emergency intervention' on electricity price

The EU is working on an "emergency intervention" plan to stem surging energy prices, which may require "structural reform of the electricity market" Commission president Ursula von der Leyen said.

Europe burned more gas for power despite crunch

Europe's energy supply from both hydro power and nuclear is down by double-digit percentages so far this year, despite the need to diversify from interrupted Russian gas supplies.

Von der Leyen unveils energy crisis plan ahead of key meeting

The new energy plan includes a mandatory target to reduce peak electricity consumption, a cap on excess revenues by renewables and nuclear firms, a solidarity mechanism to channel fossil fuel companies' profits to citizens, and a temporary state aid framework.

EU: national energy price-spike measures should end this year

"If energy prices increase again and support cannot be fully discontinued, targeted policies to support vulnerable households and companies — rather than wide and less effective support policies — will remain crucial," the commission said in its assessment.

Opinion

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. Spanish PM to delay EU presidency speech due to snap election
  2. EU data protection chief launches Frontex investigation
  3. Madrid steps up bid to host EU anti-money laundering hub
  4. How EU leaders should deal with Chinese government repression
  5. MEPs pile on pressure for EU to delay Hungary's presidency
  6. IEA: World 'comfortably' on track for renewables target
  7. Europe's TV union wooing Lavrov for splashy interview
  8. ECB: eurozone home prices could see 'disorderly' fall

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us