Brussels, 04/03/2014 (Agence Europe) - Beyond the need for specific actions for each of them, the 28 EU member states have agreed on a common imperative: integrating their markets and cutting consumption.
The examination by the European energy ministers, on 4 March, of the European Commission's analysis of energy prices and costs in Europe, which was unveiled alongside the draft energy/climate framework 2020 (see EUROPE 11002) and which will be used to feed into the question of industrial competitiveness to be examined by the European Council 20-21 March, showed the overall support of the member states to the measures proposed by the Commission to cut the cost of energy, although they stressed that all actions are not necessarily appropriate for each of them. The Greek Presidency will report back on the results of this discussion to the president of the European Council ahead of the spring summit.
According to the Commission's analysis, the price paid by consumers for electricity and gas is made up of the following three elements: energy prices (wholesale and retail price), network costs (costs of transport and distribution) and taxes. The price of energy refers to the price paid by consumers for each unit of energy they use, whilst energy costs mean the amount consumers pay for their energy consumption.
In general, the discussions highlighted the need to complete the single energy market by the end of 2014 and to develop new energy infrastructure in order to guarantee uninterrupted supply at affordable prices, particularly for vulnerable consumers. With regard to these, Hungary reiterated the need to keep in place the universal service obligation. The ministers stressed the importance of a strong regional approach and they also stressed the need for households and industry to reduce their energy consumption by improving energy efficiency.
The ministers also agreed that the differences between wholesale and retail prices would require a more in-depth analysis, although they noted that these differences are due, to a certain extent, to national circumstances. However, the ministers also agreed that international energy prices should be taken into account as an important factor in this context.
The Commission's analysis establishes that energy prices are on the up in almost all member states and have been since 2008, mainly due to taxes and levies, but also due to an increase in network costs. “The Council believes that a detailed analysis of the various costs of energy should be carried out, because very often, the prices paid by consumers are not the real costs of the energy. There are often taxes imposed by the finance ministers”, noted Greece's Minister for Energy and President of the Council, Yannis Maniatis. Commissioner Günther Oettinger said that he hoped that these taxes would be reduced. “We need to recognise that taxes have risen in recent years. In some cases, they represent up to 50% of the price of gas and electricity. We need to reduce these”, he argued. On Tuesday, the ministers also expressed broad support for the need to benchmark network costs and practices to ensure European convergence, but underlined that due regard must be given to national circumstances when seeking to identify best practices.
Many delegations stressed the importance of preserving flexibility as regards the use of state aid to energy and the environment, so that it remains consistent with the EU's energy and competitiveness objectives.
The ministers also stressed the importance of creating a level playing field on the world energy market to strengthen the competitiveness of the European industry and to mitigate increasing price differential with competitors from third countries. The international comparison made by the Commission sheds light on an increase in price gaps between the EU and its major commercial partners, which could damage its competitiveness, particularly that of the energy-intensive industries: gas prices in the EU are three to four times higher than in the United States, India and Russia, and electricity prices are double those of the US and Russia and 20% higher than in China.
For September, Oettinger pledged a new communication on total energy prices, including liability, insurance obligation, storage and infrastructure dismantling. (EH)