The Energy Ministers of the European Union Member States will meet in Brussels on Friday 9 September to discuss possible emergency measures at EU level to mitigate soaring electricity prices and present their countries’ preparedness for the coming winter.
Convened by the Czech Presidency of the EU Council (see EUROPE 13009/6), this extraordinary Energy Council will start with the discussion (in camera) on prices.
These were already high as a result of the post-Covid-19 economic recovery, and have continued to rise as a result of reduced Russian gas supplies following the invasion of Ukraine and a range of other factors such as the shutdown of French nuclear power plants (due to corrosion problems) and a drop in hydroelectricity production due to drought.
In addition to the national measures taken by the Member States, the European Commission and the EU Council consider that the situation now requires urgent action at EU level.
However, it is not expected that the Ministers’ meeting will result in any concrete measures.
According to a senior EU diplomat, the main aim is to achieve a summary reflecting the discussions in order to send a clear signal to the European Commission on what the EU Council expects. He added that the latter is expected to present proposals next Tuesday (13 September), a day before Ursula von der Leyen’s State of the Union speech.
Reducing the demand for electricity
In order to prepare for Friday’s meeting, the Czech Presidency of the EU Council had provided delegations with a series of possible options during the week (see EUROPE 13014/8).
Following this, the Commission circulated a non-paper on Wednesday 7 September outlining the package of five measures it envisages (see EUROPE 13016/1).
The first is to reduce the demand for electricity in Member States through a binding target for peak consumption and an indicative target for total consumption.
While there seems to be a consensus among EU countries on the need to reduce electricity demand, there are likely to be divisions over the instrument to be used to achieve this.
While one senior EU diplomat supported the option of a mandatory target due to the urgency of the situation, another expressed a preference for the model used in the recent gas demand reduction Regulation. This introduces an indicative target (a 15% reduction between 1 August 2022 and 31 March 2023), while providing for the possibility of making it binding through the triggering of an ‘EU-wide alert’ (see EUROPE 13000/1).
Divisions over Russian gas cap
Among the measures envisaged by the Commission, the idea of capping the price of Russian gas delivered by pipeline, supported by France (see EUROPE 13014/27), should prove particularly divisive.
Some countries, such as Italy and Belgium, are in fact advocating a general cap on gas prices.
Contrary to the Commission’s option, this instrument would also cover liquefied natural gas (LNG) and would apply to other gas-supplying countries such as Norway and Qatar.
A proposal described as “very unwise” by a senior diplomat, who said the EU should try to agree with these suppliers on a certain price rather than introducing a cap unilaterally.
For its part, Belgium considers that a cap applied only to the price of Russian gas delivered by pipeline makes sense as a sanctions measure against Russia, but not to reduce prices, according to information from the Belgian newspaper L’Echo.
“At this stage, I don’t think a majority of Member States are in favour of this instrument”, a senior EU diplomat summed up.
In addition, some Member States, led by Poland, will be keen to discuss the EU Emissions Trading System (ETS) because of its impact on electricity prices.
Leading to a new extraordinary Council?
According to several senior EU diplomats, it is possible that a new extraordinary Energy Council will be convened soon, to adopt the proposals that the Commission will have tabled on 13 September.
It cannot be excluded that the Council will follow the same procedure as for the gas demand reduction Regulation (Article 122 of the Treaty on the Functioning of the EU) in the interests of speed.
Preparing for winter
The second part of the meeting, in the public session, will be devoted to the preparation of Member States for the winter, notably in terms of gas storage and the state of their energy supply.
In this context, the Ministers should present the national measures taken or planned to reduce gas demand by 15% by 31 March 2023, in accordance with the EU Regulation. While some Ministers may use the meeting to raise the idea of triggering an EU-wide alert and thus making the target binding, the number of Member States willing to make such a request is currently insufficient (less than five), a senior EU diplomat said. (Original version in French by Damien Genicot with Camille-Cerise Gessant)