Nine European Union Member States issued a joint statement opposing the idea of reforming the European electricity market in response to the current surge in energy prices on Monday 25 October, on the eve of a meeting of Member States’ Energy Ministers in Luxembourg.
These nine countries (Luxembourg, Austria, Germany, Denmark, Estonia, Finland, Ireland, Latvia, and the Netherlands) in particular stress that the causes of this increase lie mainly in the global economic recovery and other factors related to the supply and demand of fossil fuels, “but not in the design of EU energy markets or climate policy”.
They therefore call for great caution “before interfering in the design of internal energy markets”. In their view, such an option is not “a remedy to mitigate the current rising energy prices linked to fossil fuels markets”.
They add, “We cannot support any measure that conflicts with the internal gas and electricity market, for instance an ad hoc reform of the wholesale electricity market”.
This statement sounds like a response to the French proposal, supported by a handful of other Member States such as Spain, to revise the European energy market in order to decouple the price of electricity from that of gas.
When presenting a “toolbox” to combat rising energy prices, the European Commission announced that it would ask European energy regulators (ACER) to “study the advantages and disadvantages of the current organisation of the electricity market”, with a view to submitting initial results in November and proposing recommendations by April 2022 (see EUROPE 12811/1). This intention was reaffirmed by Commission President Ursula von der Leyen on Friday 22 October at the end of the European Council (see EUROPE 12817/1).
For their part, the nine countries behind the declaration advocate ensuring a “well-integrated EU energy market” that “functions based on market mechanisms and good interconnections”, and strengthening energy efficiency and the deployment of renewable energy sources in the medium term.
In the short term, they support the Commission’s approach of focusing on temporary and targeted national measures to protect vulnerable consumers and businesses, while strengthening market surveillance.
They also emphasise, “These measures should be easily adjustable in the spring, when the situation is expected to revert to average levels”.
Next steps
The statement comes a day before an extraordinary meeting of Member States’ energy ministers on soaring energy prices.
The meeting will start with an open debate between the ministers on the impact of the price increase and possible measures at national and European level before continuing with a lunch, in camera, specifically devoted to the EU’s gas supply. No formal conclusion is expected, it was reported.
While the Commission's proposed climate legislation package (‘Fit for 55’ package) and the EU taxonomy are not officially on the agenda, there is a good chance that both topics will be raised by some ministers, as was the case at the European Council (see EUROPE 12818/4) and at the last meeting of EU Environment Ministers (see EUROPE 12806/6).
This could lead to an arms race over the issue of nuclear and gas and their potential inclusion in the EU taxonomy (see EUROPE 12703/2).
See the statement: https://bit.ly/3b0glji (Original version in French by Damien Genicot)