In a document dated Sunday 4 September, the Czech Presidency of the Council of the European Union compiled a series of possible emergency measures at EU level to combat rising energy prices, ahead of the meeting of Member States’ energy ministers scheduled for Friday (9 September).
Among the options mentioned, the Czech Presidency proposes to decouple the impact of the gas price on the electricity price or at least to limit it. The paper presents three possible approaches: - temporarily cap the price of gas used for electricity generation; - temporarily cap the price of gas imported from Russia; - temporarily exclude gas-fired electricity generation from pricing in the electricity market.
Furthermore, Prague proposes as an alternative option to increase the liquidity of the market.
Like a European Commission paper that we recently reported on (see EUROPE 13012/1), the Czech paper also mentions the possibility of coordinated measures for reducing electricity demand and potentially capping the price of electricity supplied by intra-marginal generators (generators with lower marginal costs than gas-fired power plants).
The last option considered is to assess the possibilities of using the EU Emissions Trading System (ETS) to combat high electricity prices.
This option is unlikely to please the Commission, which has repeatedly stated that the ETS has contributed very little to the increase in wholesale electricity prices. In any case, the latter does not seem to be in favour of temporarily neutralising the effects of this system on prices by subsidising the part of the cost of producing electricity that results from the ETS (see EUROPE 13012/1).
In addition to putting emergency measures in place, Prague considers that the EU “should continue discussing a systemic upgrade of the Internal Energy Market Design so that it would be better prepared to similar market conditions in the future”.
See the Czech document: https://aeur.eu/f/2y0 (Original version in French by Damien Genicot)