At a meeting of energy ministers held in Brussels on Thursday 2 December, Member States appeared as divided as ever over what action to take at EU level in order to address the current surge in energy prices and avoid a similar situation in the future.
Despite this being the third debate between Ministers on this subject (see EUROPE 12820/2, 12796/9), two camps continue to oppose each other.
On the one hand, France, Spain, Italy, Greece and Romania are calling for the implementation of both short-term and longer-term measures.
In a non-paper published on the eve of the meeting, these countries propose, among other things, to amend the European directive (2019/944) on the internal electricity market in order to: - allow Member States to apply regulatory mechanisms to ensure that electricity prices reflect the costs of the electricity generation mix used by the country; - provide warnings to consumers about the risks associated with dynamic electricity price contracts; - introduce the right for households to request an offer that protects them from short-term electricity price fluctuations, for example by obliging electricity suppliers to offer them a contract based on a “prudent procurement strategy” such as the progressive purchase of electricity over the period of one or two years before delivery.
They are also asking the European Commission to explore the option of a “voluntary joint procurement/centralised gas purchase mechanism”.
In addition, the five countries are calling for an immediate broad stakeholder consultation in order to identify, within the space of six months, the necessary reforms to the current electricity market and to facilitate the development of long-term (five to ten years) electricity contracts “based on zero-emission energy”.
During the meeting, they were supported by Slovakia, which described the issue of the link between national energy mixes and energy prices as “relevant”.
On the other hand, Austria, Germany, Denmark, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands are opposed to reforming the European energy market, based on the preliminary analysis of the Agency for the Cooperation of Energy Regulators (ACER) that looked at the current design of the European wholesale electricity market (see EUROPE 12833/7).
In a joint statement issued a few hours before the non-paper, these countries emphasised the fact that the introduction of price ceilings or technology-dependent average prices based on the national energy mix could jeopardise security of supply, increase the costs of integrating variable renewable energy generation in the long term and undermine the integration of the European electricity market. (see EUROPE 12844/13).
At the meeting, Lithuania expressed its support for this group of countries, but wanted a “more flexible mechanism to tackle energy price volatility”.
Croatia also seemed to adopt a position that was quite close to the position of these countries.
Belgium, for its part, has called for caution, being careful not to interfere with market-based pricing.
Many Member States such as Portugal, Spain, Malta, Cyprus, Ireland, Belgium and Luxembourg have also emphasised the need to strengthen interconnections between countries.
Joint purchase of gas
Reacting to the ministers’ interventions, the Commissioner for Energy, Kadri Simson, acknowledged the need to examine how the retail markets function, while giving assurances that the European Commission would study the proposals presented in the non-paper.
She said that the Commission’s forthcoming gas package (due on 14 December - see EUROPE 12839/4) “will include an enabling framework for the joint procurement of strategic gas stocks by regulated entities, in line with energy market regulation and the EU competition rules”.
So far, 20 Member States have put in place national measures, totalling more than €3.4 billion, to combat rising energy prices, said the Commissioner.
See the proposals from France, Spain, Italy, Greece and Romania: https://bit.ly/3EkBtOf (Original version in French by Damien Genicot)