EU to introduce emergency measures to limit electricity prices

European Commission President von der Leyen said that the authorities were planning "emergency intervention" and structural reform of the electricity market. This may mean cutting off the link between electricity prices and natural gas prices.

European Commission (European Commission)The President stated on Monday that the European Union is preparing to introduce emergency measures to curb the surge in electricity prices. At present, energy costs have repeatedly set new records across the entire European continent.

At a time when EU officials are committed to alleviating the pressure on families and businesses this autumn, Ursula von der Leyen(Ursula von der Leyen)The soaring electricity prices have exposed the limitations of our current electricity market design.

In his speech in Slovenia, von der Leyen said that the European Commission was planning "emergency intervention" and structural reform of the electricity market.

"We need a new electricity market model that can truly work and help us find balance again," she said.

European Union capitals are exerting increasing pressure to reform their energy markets and cut off the link between electricity prices and soaring natural gas prices, which has significantly increased costs for businesses and households.

Joseph Sikra, Minister of Industry and Trade of the Czech Republic(Jozef Sikela)He stated that he expects the relevant draft proposals to be submitted in a timely manner to the emergency meeting of the European Energy Commission next week. "We must separate electricity prices from natural gas prices," he said. He added that the EU can set a cap on the price of natural gas used for power generation.

Against the backdrop of concerns about shortages this winter, European benchmark electricity prices have risen to a ten-year average level10Double, with the increase in natural gas costs13Roughly synchronized times. With Shell(Shell)The CEO warns that the energy crisis will continue for more than a winter, and Germany's electricity prices will briefly exceed megawatt hours for the first time on Monday next year1000euro.

The wholesale electricity price reflects the price of the last unit of energy purchased in an auction held by a member state. Currently, it reflects the price of natural gas, rather than the price of cheaper renewable energy.

Since the start of the Ukrainian war, natural gas prices have skyrocketed, and as Russia threatens to further restrict supply to the European Union, natural gas prices may further rise. EU leaders - including Mario Draghi from Italy(Mario Draghi)And Pedro Sanchez from Spain(Pedro Sánchez)——Brussels has been urged to consider setting a price ceiling.

German Minister of Economy Robert Habeck(Robert Habeck)Recently, we also support the idea of carrying out "fundamental reforms" and decoupling the two markets.

Even Austria, which traditionally believes in market liberalism, sided with interventionists last Sunday. We cannot let Vladimir Putin(Vladimir Putin)Every day determines the electricity prices in Europe Austrian Prime Minister Karl Nekhamer(Karl Nehammer)After convening an emergency meeting on energy prices last Sunday, it was stated.

In Belgium, Minister of Energy Jenna van der Stretten(Tinne Van der Straeten)Last Sunday atTwitterThe European energy market has malfunctioned and urgently needs reform, according to the report. She emphasized that even though electricity generation can be as cheap as last year, electricity prices have reached record levels.

Brussels has remained cautious about abandoning the current market pricing system, as it provides a foundation for future investments in renewable energy and other electricity infrastructure.

However, von der Leyen6The month implies that the European Commission will have to reconsider the system. She pointed out that the current market design is20Years ago, it may not be suitable for the current situation.

She told reporters at the time that she was studying "alternative market design, potential decoupling of price generation between natural gas and (electricity) markets.".

EU Energy Regulatory Agency Cooperation Agency(ACER)A warning has been issued not to fundamentally reform the operation of the electricity market, but the organization is4Yue once said that in the event of a sudden and significant increase in electricity prices, there can be a "temporary safety valve" to automatically limit prices.

Source:FTChinese Website  translator/Hefeng