What is the European electricity tariff shield?
Electricity: Austria calls for a European tariff shield.
The Austrian Prime Minister calls for anticipating the upcoming price explosion for this winter.
This Sunday, Austrian Chancellor Karl Nehammer called on the European Union (EU) to "decouple the price of electricity from that of gas" to bring it down, and says that this topic is on the table at an upcoming emergency meeting.
European electricity tariff shield
"The price of electricity must fall" and "we must not let Putin decide every day instead of the Europeans," the Conservative leader of the government said in a statement.
"We must stop this madness that is currently plaguing the energy markets," Karl Nehammer added, saying that this was only possible within a European framework and not only at national level.
The whole of Europe is being hit by a surge in energy prices and Czech Prime Minister Petr Fiala, whose country holds the EU presidency, announced on Friday that his country would convene an emergency meeting of energy ministers.
"The subject [of decoupling] will be on the agenda," assured the Chancellor, who said he had discussed it beforehand with his German counterpart Olaf Scholz and with Petr Fiala.
European electricity tariff shield details
After six months of war in Ukraine, energy prices in Europe had a crazy week with new records on Friday, presaging an explosion in the cost of living next winter.
Several causes are at the origin of this explosion, starting with the drying up of Russian gas to the European countries that support Ukraine. However, 20% of European electricity is generated by gas-fired thermal power plants.
The crisis is taking the whole of Europe by surprise, which was counting on the post-Covid recovery plans to initiate an energy transition, in order to get out of fossil fuels emitting greenhouse gases, by developing renewables or hydrogen.
# European electricity tariff shield #
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The increase in electricity tariffs in 2023 will be "contained", assures Bruno Le Maire
The 4% cap will be maintained until the end of 2022, there will be no catch-up on this cap in 2023," said the Economy Minister
The increase in electricity tariffs for consumers will be "contained" in 2023, while prices have exploded on wholesale markets, Economy Minister Bruno Le Maire assured on Saturday. "The 4% cap will be maintained until the end of 2022, there will be no catch-up on this cap in 2023, and the increases discussed by the President of the Republic and the Prime Minister will be contained increases," said the minister on the sidelines of the congress of majority executives in Metz.
The minister then clarified that the "contained increases" to come in 2023 would also concern the price of gas, without elaborating further. "For the most modest households, there will be energy vouchers that will help those who are most in difficulty to pay their energy bills," added Bruno Le Maire.
"We don't want inflation to translate into economic brutality for French households," the minister stressed. "We want it to be soft, bearable, contained," he said, adding that the effects of inflation for the population had to be "smoothed over time".
For companies, Bruno Le Maire said he wanted to simplify access to a three billion euro fund for those who have difficulty paying their electricity bill. He also recalled that 1.5 million SMEs benefited from the regulated electricity tariff and that others benefited from preferential tariffs.
Finally, when asked about the cost to the state of these aids and the energy price cap, Bruno Le Maire indicated that "all the budget forecasts have been made by integrating the very sharp increase in electricity and gas prices. We are not caught short".
Wholesale electricity prices for 2023 broke a record for France on Friday, reaching more than 1,000 euros per megawatt/hour (MWh), compared to about 85 euros per MWh a year ago. Gas prices, meanwhile, were moving this week at historic levels, more seen since the beginning of the Russian invasion in Ukraine, i.e. more than 300 euros per MWh.
