“The surge in electricity prices clearly shows the limits of the current functioning of the market”, explained the President of the European Commission.
The European Union is preparingemergency intervention and structural reform of the electricity market“, the operation of which is highly criticized by some of the Member States of the EU in the face of soaring prices, announced Monday the President of the European Commission Ursula von der Leyen. The reform, demanded for a long time by France but which divides the Twenty-Seven, will be on the menu of a meeting of EU energy ministers on September 9 in Brussels.
“The surge in electricity prices clearly shows the limits of the current functioning of the market. This one had been conceived in a very different contextexplained the President of the European Commission during a conference in Bled, Slovenia. “That is why we are currently working on emergency intervention and structural reform of the market“, she said, without further details.
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The September 9 date was announced on Monday by Czech Industry Minister Jozef Sikela, whose country holds the rotating EU presidency. “We need to fix the energy market. The solution at EU level is by far the best“, he underlined on Twitter. German Chancellor Olaf Scholz also urged member states on Monday to agree “rapidly” and of “coordinated wayon a reform. The current systemcannot be described as functional if it leads to such high electricity prices“, did he declare.
The fear of an explosion in the cost of living this winter
Calls to change the common electricity market grow as, after six months of war in Ukraine, energy prices soar to stratospheric levels, raising fears of a winter cost of living explosion next. On the European market, it is the cost price of the last source of electricity mobilized to meet demand, often gas-fired power stations, which determines the price imposed on all operators on the continent. This price soared in concert with the surge in gas prices linked to the drastic drop in Russian gas deliveries to Europe.
On Sunday, Austrian Chancellor Karl Nehammer called on the EU to “decouple the price of electricity from that of gas” for “stop this madness“. According to him, this decoupling will be on the menu of the September 9 talks. On the same day, Belgian Energy Minister Tinne Van der Straeten called for the reform of “a failing market“, which is not “more sustainable for many consumers and families“.
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This decoupling was demanded by Paris, which considers that French consumers are penalized, prevented from fully benefiting from the low costs of nuclear energy by a mechanism deemed “obsolete“. Last year, in a joint statement issued in October 2021, nine member states, including Germany, fiercely opposed any reform of the electricity market, deeming the current system effective for “contribute to innovation” and “facilitate the transition» towards green energies.
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