EU countries seek emergency solution to rising energy bills

Energy ministers from European Union countries meet on Friday to seek solutions from a long list of possible measures to protect citizens from sky-high energy prices as winter approaches.

The talks are based on a series of proposals by European Commission President Ursula von der Leyen – including a price cap on Russian gas, a windfall levy on non-gas power plants, a block-wide cut in electricity demand and more emergency credit lines for energy companies facing increasing collateral requirements .

EU diplomats said countries appeared broadly supportive of measures to provide liquidity to businesses, and some had also supported curbing electricity demand.

Other suggestions were more divisive. The price cap on Russian gas has so far found no support in a majority of countries, and some are wondering how it would help contain prices given the small amounts of gas Moscow is now sending to Europe.

“Our intention is primarily to lower prices. Capping only Russian gas won’t lower prices,” Belgium’s Energy Minister Tinne Van der Straeten told Reuters.

The Baltic states are among supporters of the idea, arguing that a price cap would further deprive Moscow of revenue to fund military activities in Ukraine.

President Vladimir Putin said Wednesday that Russia will halt gas supplies to Europe if it imposes a price cap. Support for the policy is scant among central and eastern European countries unwilling to lose the dwindling supplies they still receive.

Deliveries from Russian gas pipelines via the three main routes to Europe have fallen by almost 90 percent over the past 12 months, data from Refinitiv shows. Moscow has attributed the supply cuts to technical problems caused by Western sanctions over its invasion of Ukraine.

EU countries are not expected to approve any directives on Friday, but to signal Brussels which options have enough support to be turned into final proposals. EU emergency laws are usually passed by a majority of countries, although some require unanimous approval.

An idea to reclaim revenue from non-gas power producers and use the money to cut consumer bills has also drawn opposition in some capitals.

The EU proposal would limit the price non-gas generators pay for their electricity to €200 ($199.86) per megawatt hour and would apply to wind, nuclear and coal generators, according to a draft by Reuters.

European electricity prices are typically set by gas plants, and the cap would aim to bring down the cost of electricity generated by plants that are not exposed to skyrocketing European gas prices – which rose 12 times their levels over the past month reached by early 2021.

France, home to Europe’s largest fleet of nuclear power plants, questioned whether the same limit should apply to all generators.

“We question the fact that there is a single revenue cap for all types of electricity generation and all EU countries,” said a source from France’s energy ministry.

The source said Paris supports an EU price cap on Russian pipeline gas but warned that the cap on liquefied natural gas could put the EU at a disadvantage to other countries in much-needed supplies.

An EU diplomat from one country said a “large group” of states are seeking some sort of energy price cap to bring down bills, with a price on gas used to generate electricity and a block-wide cap on all gas imports among the ideas under discussion.

“The question is what and how you cover. It’s the devil in the details,” said the diplomat.

https://www.independent.ie/business/world/eu-countries-seek-emergency-solution-to-soaring-energy-bills-41974889.html EU countries seek emergency solution to rising energy bills

Fry Electronics Team

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