Debate: EU response to the increase in energy prices in Europe
Date: TUESDAY, 13 SEPTEMBER 2022
Speaker: Mikuláš Bek
Language: EN

This current energy market situation is very tense and has further deteriorated after the indefinite suspension of Nord Stream 1. Gas prices are now out of control. To illustrate, in August, natural gas prices reached new records at EUR 340 per megawatt hour, compared to EUR 40 per megawatt hour a year ago. Because of the rising cost of input fuels, benchmark electricity prices in Europe have also surged by almost 300% in 2022. The current level of energy prices has pushed the inflation in the eurozone to 9.1% in August. It is the ninth consecutive month to set the record rate for inflation in Europe, with consumer prices rising steadily since November 2021. Moreover, recent heatwaves and droughts across Europe – the issue I had the opportunity to discuss with you this morning – have hampered the EU’s ability to make full use of our hydroelectric facilities. At the same time, the capacity of some nuclear facilities has been temporarily reduced. Also, the use of coal is facing problems due to logistical issues. Under those circumstances, the gas price crisis has become an electricity price crisis.  Furthermore, due to high energy prices, companies across Europe, from big industrial groups to medium-sized enterprises, are struggling to cope with the situation, and some are already halting their productions. This alarming trend can have potentially disruptive consequences for our economy. Over the last couple of months, several solutions have been proposed and some have even been implemented, both at European and national level. These include, among others, the emergency plan for filling gas reserves at 80% by 1 November 2022, and the EU-wide gas consumption reduction measures adopted by the Council on 5 August 2022 as a matter of urgency.  Since these have not been sufficient to mitigate the current crisis, further immediate, implementable solutions are needed to protect our consumers, our market operators, but also our own internal market from this excessive volatility of gas and electricity prices. Last Friday, the Extraordinary Energy Council discussed concrete, tangible and immediate emergency solutions. There was a novel agreement that urgent EU-wide measures are needed, but at the same time national specificities, specificities must be respected. Member States mandated the Commission to propose specific short-term emergency measures, including capping the revenues of companies that are producing electricity with low costs, decoupling gas and electricity prices, or even putting a price cap on gas imports, increasing liquidity on the electricity market and coordinated demand reduction measures for electricity. I appreciate that the Commission’s services followed up quickly on some of the elements of last week’s ministerial debate, with proposals on electricity savings and on capping of revenues from marginal companies to be presented tomorrow. We will be expecting further proposals from the Commission on other measures I mentioned as soon as possible. The emergency interventions should remain temporary, preserve the fundamentals of the internal energy market and cross-border trade, ensure the EU’s security of supply, alleviate pressure on customers, and be consistent with the current efforts to reduce gas demand and the objectives of the European Green Deal whilst taking into account national specificities.  In this spirit, we are looking forward to looking into the details of the proposals the Commission will present tomorrow. Let me assure you that the Council will examine this swiftly. Our ambition is to find agreement on the first emergency measures among the Member States already before the cold season starts. That is why the Presidency decided to convene another extraordinary Energy Council meeting with the aim of adopting the necessary emergency measures at the end of September. Thank you very much for your attention.