The EU plans to take more of the profits from renewable energy producers and oil companies, intervene in the market and provide liquidity support to traders. This should bring down the high energy prices. However, an expansion of production was hardly discussed in Brussels.
Pipeline tubes for the transport of natural gas are stored in the Sassnitz-Mukran seaport.
In the past few months, German Economics Minister Robert Habeck has traveled from Qatar to Canada in search of a substitute for Russian natural gas. In Brussels, he proudly announced on Friday that his country is now in an “amazingly strong” situation.
The German nuclear elephant in space
In Europe, however, there is currently a shortage of cheap electricity. In order to meet the demand, the expensive natural gas power plants have to step in so often that the electricity prices rise with the high gas price. For Habeck, however, a journey into his inner being would be necessary above all if he wanted to expand the electricity supply in Germany or just keep it the same.
It is obvious that the Greens have trouble looking pragmatically at the planned shutdown of the last three nuclear power plants. All he could bring himself to do was keep two of them on a sort of emergency basis. The option of restarting the three reactors that were shut down at the end of 2021, which is definitely worth considering, is not even mentioned.
It becomes particularly absurd when you consider that Ukrainian Prime Minister Denys Schmyhal recently has offeredto export nuclear power to Germany. As is well known, Ukraine has been connected to the European power grid since March. It would be nuclear power from a country at war for a country that has phased out nuclear power production over safety concerns.
It’s the famous elephant in the room, which everyone is probably aware of, but is rarely mentioned publicly. Rather, the energy ministers dealt with the Commission’s proposals, which on the one hand want to change the price of gas and electricity and on the other hand also want to set savings targets for electricity. How production can be increased is currently not up for debate in Brussels.
Ministers back the Commission
Rather, the energy ministers largely backed the Commission’s proposals from mid-week. However, as is well known, the devil is in the details, and such details will now have to be worked out by Commission officials over the weekend. Because Ursula von der Leyen should publish the corresponding legislative proposal as early as Tuesday.
The meeting of the energy ministers served to sound out measures that could reach a consensus, so that the proposal can then be passed quickly. To this end, the current Czech Council Presidency would call another extraordinary meeting of energy ministers in Brussels before the end of September.
But it remains to be seen whether we can quickly agree not only in principle, but also in the details. Much is still unclear.
The first planned measure provides that manufacturers with low marginal costs in electricity production will no longer receive the market price on the spot market on the exchange. Rather, the corresponding price should have an upper limit; the “Financial Times” wrote of 200 euros per megawatt hour instead of a market price of around 440 euros per megawatt hour.
However, it is still unclear whether the measure actually only affects the spot market. That would give the providers of cheap electricity, such as renewable energies, nuclear power and coal, an incentive to no longer sell their electricity at the capped price on the exchange, but elsewhere at the higher market price.
The President of the Commission, Ursula von der Leyen, then said that the difference between the capped price and the market price should be skimmed off and passed on to the Member States. These would use the money to subsidize part of the energy bills of the citizens and companies most affected.
Habeck spoke on Friday after the council meeting, however, of a different model. Accordingly, each electricity category (nuclear, solar, etc.) would have its own cap and the difference would not be skimmed off. Rather, the electricity buyers would have to pass on the price advantage to the consumers. But how can this be ensured?
The ministers also want to collect a kind of solidarity contribution from oil companies. It would simply be an increase in the profit tax for an industry. But because taxes in Brussels mean unanimity, people prefer to speak of a solidarity tax. Liquidity aids for energy traders are also to be made possible and nationally adapted electricity saving requirements for times of high electricity demand are to be introduced.
A general price cap for natural gas is also planned. But while the Commission only aimed at Russian gas, various member states want to purchase all gas at a discount. Only: how do you want to procure liquefied natural gas (LNG) from the world market? After all, the Europeans have filled their storage facilities in recent weeks not least by buying the LNG world market almost empty. And not with a price cap, but on the contrary by paying very high prices.