The EU’s energy ministers will discuss the forthcoming reform of the European electricity market and the development of the EU’s energy policy in order to strengthen Europe’s economic competitiveness during their informal meeting in Stockholm on Monday 27 and Tuesday 28 February.
On Monday morning, in a first working session, the Swedish Presidency of the EU Council will ask ministers about the long-term problems of the European electricity market and ask them to prioritise the measures - which the Commission has identified in its specific consultation (see EUROPE 13105/10) - that are most likely to have an impact on energy bills next winter and to accelerate investment in decarbonising the economy.
Given the differences in national energy mixes, the aim is to “build a better understanding” between ministers of the problems of each Member State before the start of negotiations on the reform of the electricity market, a diplomatic source said on Wednesday 22 February. According to this source, the Commission, which is still analysing the responses to the consultation, will not reveal its intentions at this stage, while its reform proposal is expected on Tuesday 14 March.
“Debates on how to improve the electricity market design are ongoing in every Member State, but the diagnosis has often been different due to different national energy mixes, trade flows, financial instruments, and economic resources in each country. The purpose of this discussion is to find a common understanding of different challenges and priorities preparing for next winter and beyond”, says a preparatory document from the Swedish authorities.
Gas. During this first session, the ministers will also take stock of the measures already taken at European level that have made it possible to combat soaring gas prices, diversify sources of supply to reduce the EU’s dependence on Russian gas and accelerate the climate transition.
While gas supplies for this winter remain high, there will be talk of possible new measures to safeguard the EU’s security of supply, “especially in view of the coming winter”, this source said.
In Brussels last Wednesday, International Energy Agency executive director Fatih Birol said the winter of 2023-24 could be more difficult than the current one due to dwindling Russian gas supplies and likely increased competition from China (see EUROPE 13127/11).
“Securing supply in view of next winter will be more challenging than in 2022. With normal winter temperatures and a return to a normal level of Chinese liquefied natural gas (LNG) demand, we could face a deficit close to 60 bcm. This is without considering the risks of further supply disruptions or sabotage of gas infrastructure”, predicts the Swedish Presidency.
Energy and competitiveness. On Tuesday morning, the ministers will discuss how the EU’s energy policy should evolve in order to accelerate the decarbonisation of the economy by investing massively in the ‘net zero’ industry while preserving and even strengthening the competitiveness of European companies.
We want member states to think long-term beyond the ‘Fit for 55’ legislative package, said a second diplomatic source.
In its preparatory document, the Swedish Presidency notes that in the energy field, the EU’s trade balance has remained positive in several clean technologies, such as wind power, while the trade deficit has increased in the markets for heat pumps, solar panels and biofuels due to surging material prices, a shortage of skilled labour and industrial policies in other parts of the world such as the US Inflation Reduction Act (IRA).
Last Wednesday, Mr Birol said that energy costs in the EU, although gas prices have fallen to levels below those before Russia’s military aggression in Ukraine, are currently seven times higher than in the US and three times higher than in China.
The Swedish authorities also stress the importance of reducing the administrative burden, which falls more on SMEs than on large companies.
It should be noted that the Swedish Presidency will hold a parallel meeting of EU transport ministers, with a joint working session scheduled for Monday afternoon (see other news).
See the Swedish Presidency document: https://aeur.eu/f/5hx (Original version in French by Mathieu Bion)