Debate: European solutions to the rise of energy prices for businesses and consumers: the role of energy efficiency and renewable energy and the need to tackle energy poverty
Date: WEDNESDAY, 6 OCTOBER 2021
Speaker: Kadri Simson
Language: EN

Let me assure you that the Commission fully agrees with your assessment that we must take the rising energy prices and energy poverty seriously and we must act. As I said earlier, next week the Commission will present a toolbox as requested by the Member States, and we are looking at all options and ideas on the table. Allow me to address some of the specific points that were made during this debate.  Most of you have called for priority attention to be given to energy-poor and low-income households, and I do agree. But there were already millions of Europeans living in energy poverty before the price hike, and more, including middle income households, will be impacted if this situation continues.  EU rules give Member States several options to shield vulnerable people. They can offer direct income support and make sure that no one is disconnected from the grid and extra fiscal revenues from energy taxation, or EU ETS revenues can be used to address the social impact. We assess that Member States received in the first nine months of 2021 an additional 10.8 billion in ETS revenues compared to the same period in 2020.  For the medium term, we have proposed a Climate Social Fund for a more structured response to address the social and the distribution impact on the most vulnerable of the energy transition. We will present by the end of the year a recommendation to provide policy guidance that is needed to ensure that Member States adequately address the social and employment consequences of the Clean Energy Transition.  Some of you raised the issue of the electricity market design and suggested the need for adjustments. There are no taboos, but we should not forget that the EU energy system is the most reliable in the world, and the design of our electricity market there is not the cause of the surge in electricity prices. Since we have integrated the market, we have had less blackouts and supply interruptions, and consumer prices have been very stable. There is no alternative market model that would provide lower prices in the current situation. What we see now is prices going up and energy supply being a challenge all over the world. As I said, it could be useful to launch a study on price formation and investment incentives in the electricity market and overall a well-integrated, well-functioning EU electricity market with more competition, more renewables and more energy efficiency, is our best tool to deliver affordable energy to European consumers. Coming to the specific EU-level measures. One area we are looking at very closely is gas storage and procurement. While gas storage levels in the EU are increasing, they are still lower than usual at this time of year. Joint procurement of gas has been proposed recently by Spain, and also suggested by others, but it’s not a new idea and has been discussed before, but complexity and practical obstacles have always outweighed the benefits. Similarly, the idea of a joint procurement of emergency gas reserves on a voluntary basis has been proposed, and we assess all of these options to increase preparedness while gas as a transitional fuel is progressively phased out.  I know that some of you are concerned about possible manipulation of the EU energy market and these are serious concerns. We are looking into this claim through our competition angles. Our initial assessment indicates that Russia has been fulfilling its long-term contracts but not providing any additional supply, but the response to any type of speculation and market manipulations is another area where I believe we should assess our options for action. But ultimately the solution is the same. Whether it is about prices, security of supply or climate, scaling up local affordable renewable energy is the way forward and I would prefer to be in a position where we are not dependent on foreign fossil fuels.  I will share your concerns and suggestions for action with President von der Leyen and the College and we will reflect them in our toolbox communication next week. I will present it and discuss it with the Committee on Industry, Research and Energy (ITRE) the following day, so continuing the dialogue we have had just today.