What is the EU energy prices crisis?
The EU is seeking a consensus to stem the surge in energy prices.
The European Union's energy ministers met urgently in Brussels on Friday to discuss joint measures to stem the energy crisis linked to Russia's invasion of Ukraine. 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 soaring gas and electricity prices caused by the Russian offensive in Ukraine.
EU energy prices crisis
Under intense pressure, the Commission has submitted to the 27 Member States a range of mechanisms - some of them very complex - with the hope of reaching, next week, a text that is sufficiently consensual to be quickly approved.
While the idea of confiscating nuclear and renewable energy superprofits to redistribute them is welcomed, the EU member states are very divided on a cap on Russian gas prices.
At the heart of the debates: the dysfunctions of the European electricity market, where the wholesale price is indexed to the cost price of the last power plant mobilized to meet demand - often a gas-fired power plant.
EU energy prices crisis proposals
The Commission proposes to cap the income of nuclear and renewable energy operators (wind, solar, biomass, hydroelectric) who sell their electricity at a price far above their production costs.
The States could levy the difference between this ceiling (a level of 200 euros /megawhatt hour is mentioned) and the market price to redistribute these superprofits to vulnerable households and businesses.
"The idea has received a huge amount of support among the states. After that, the devil is in the details, it will be necessary to determine the ceiling," emphasizes a European diplomat. Berlin and Paris had requested such a "contribution mechanism".
At the same time, the Commission wants to demand "a temporary solidarity contribution" to producers and distributors of gas, coal and oil, favored by the soaring world prices. There needs to be "a discussion without taboos" on "energy groups making exceptional profits in times of war," Austrian minister Leonore Gewessler said on Thursday.
EU energy prices crisis agreement
After the agreement of the Twenty-Seven at the end of July to reduce their gas consumption, the Commission is also proposing to set "binding targets" to reduce electricity demand, with a decrease for each State of "at least 10% of net monthly consumption" and "at least 5%" at peak times.
Again, the proposal is widely welcomed. A European diplomat notes the same "great convergence of views" regarding support for electricity suppliers, who are short of cash in the face of market volatility: European rules could be relaxed to allow them to quickly provide public guarantees.
On the other hand, many countries have recently welcomed the idea of capping the price of Russian gas supplies, proposed by the Commission to further restrict the Kremlin's revenues.
Its impact on the market is causing skepticism in some European capitals, while Russian gas now accounts for only 9% of European imports (compared to 40% before the war). And some countries, including Hungary, which remain very dependent on Moscow for energy, fear dire economic consequences.
