While gas prices soared, pulling with it the price of electricity up Brussels this Wednesday morning, a range of measures to alleviate consumer bills.
Le Monde with AFP
How to cushion the social impact of soaring energy prices? Brussels reveals, Wednesday, October 13, an arsenal of temporary measures which can draw the bloc, and avenues for reform, but refuses to sacrifice its environmental goals.
While gas prices soared to record highs, pulling the price of electricity and threatening to derail the economic recovery, the “toolbox” of the European Commission will propose recipes to ease the consumer bills.
Brussels will encourage states to reduce the heavy energy taxes and redistribute the benefits of the price increase to the poor, said Monday the European Internal Market Commissioner, Thierry Breton.
In addition to the decisions already adopted by several governments (tax cuts, energy checks, targeted aid to the poorest), the Commission will give “the ability to also reduce VAT,” he said. It must also submit tracks more ambitious reforms discussed at the EU summit on October 21 and 22.
Strategic Reserve
Paris wants to revise the rules of the common electricity market, including pricing judged too dependent on the prices of fossil fuels. Madrid offers “bulk purchasing” of gas, and Athens a “transition fund” absorbent increases over. But other countries, like Germany and the Netherlands, warned against “extreme measures”, arguing that this is a temporary situation.
“We have an electricity market that works well, allowing for very competitive prices for two decades. Interfering would be very dangerous, it could destroy confidence in the market,” warns the Luxembourg Minister Claude Turmes. He proposed instead to use a modification of a “Gas” in December to combat speculation.
Given the divided states, the President of the Commission, Ursula von der Leyen, discussed the project of a “strategic reserve” of gas as advocated notably Spain. For now, European stocks of gas, to 76% of capacity against 90% on average over the past decade are “tight” but “adequate to cover winter needs,” assured the Commissioner for Energy, Kadri Simson. The Bruegel institute, however, warns against the “shortages” if “these low stocks are badly managed.”
Above all, Ursula von der Leyen said she was prepared to examine the price formation and to increase the “transparency” of the market. “You have to look the possibility of decoupling the price of electricity and those of gas, because we have [in the EU] cheaper energy, such as renewables,” she said, without mentioning the nuclear .
the debate on the re-launched nuclear
The crisis in gas prices has revived the debate on nuclear power, cheaper energy and carbon-including Paris touts but is criticized by several states, led by Germany. Some, like the leader sovereignty Hungarian Viktor Orban took advantage of soaring prices to attack the “Green Pact” of the EU to reduce its emissions by 55% of carbon by 2030, and CO2 market where energy suppliers must fulfill “rights to pollute”.
A speech refuted by the Commission, concerned that the crisis could jeopardize its climate ambitions, going through the gradual rising cost of fossil fuels. “Only one-fifth of the increase in current prices can be attributed to the carbon market price increases, the rest comes shortages of supply,” said Frans Timmermans, Vice-President of the Commission.
In front of MEPs, he called for accelerating the transition to renewable “If we adopted this Green Pact five years ago, we would have been much less dependent on natural gas,” he said.
But for lack of “clearer commitments of governments” by funding essential infrastructure and ensuring a high carbon price, “investors will remain reluctant to switch to renewable,” experts warn of ‘Bruegel Institute.