EU seeks consensus to stem soaring energy prices

Published on: 09/09/2022 – 08:04 Meeting urgently in Brussels on Friday, the energy ministers of the European Union, to work on common measures to stem the energy crisis linked to the invasion of Ukraine by Russia. But internal divisions between member countries persist. European energy ministers are expected at the turn. On Friday, September 9, they will try to agree on a series of emergency measures to stem the surge in gas and electricity prices caused by the Russian offensive in Ukraine.Under strong pressure, the Commission submitted to the 27 Member States a panoply of mechanisms – some very complex – with the hope of arriving, next week, at a text sufficiently consensual to be quickly approved. If the idea of ​​confiscating the superprofits of nuclear and renewable to redistribute them is welcomed, EU member countries are very divided on a Russian gas price cap. At the heart of the debate: the dysfunctions of the European electricity market, where the wholesale price is indexed to the cost price of the last plant mobilized to meet demand – often a gas-fired plant. The EU agrees on the redistribution of superprofitsThe Commission proposes to cap the revenues of nuclear and renewable energy operators (wind, solar, biomass, hydroelectric) who sell their electricity at a price well above their cost of production. States could levy the difference between this ceiling (a level of 200 euros/megawhatthhour is mentioned) and the market price to redistribute these superprofits to vulnerable households and businesses. “The idea received enormous support among States. Afterwards, the devil is in the details, it will be necessary to determine the ceiling”, underlines a European diplomat. Berlin and Paris had asked for such a “contribution mechanism”. At the same time, the Commission wants to demand “a temporary solidarity contribution” from producers and distributors of gas, coal and oil, favored by the surge in world prices. We need “a discussion without taboos” on “energy groups making exceptional profits in time of war”, hammered, Thursday, the Austrian minister, Leonore Gewessler. Twenty-Seven at the end of July to cut their gas consumption, the Commission also proposes to set “binding objectives” to reduce the demand for electricity, with for each State a drop “of at least 10% in consumption net monthly” and “at least 5%” at peak times. Again, the proposal is widely welcomed. A European diplomat notes the same “great convergence of views” concerning support for electricity suppliers, short of cash in the face of market volatility: European rules could be relaxed to allow them to be quickly provided with public guarantees. On the other hand , many countries have warmly welcomed the idea of ​​capping the price of Russian gas supplies, proposed by the Commission to further restrict the Kremlin’s income. Its impact on the market is causing skepticism in some European capitals, while Russian gas only represents 9% of European imports (compared to 40% before the war). And some countries, including Hungary, which remain very dependent on Moscow for energy, fear disastrous economic consequences. With AFP