“This experience today of the rising energy prices is a clear wake up call… that we should accelerate the transition to clean energy, wean ourselves off the fossil fuel dependency,” a senior EU official told reporters as the European Commission unveiled a series of measures aimed at tackling the crisis.
The European Union is facing a sharp spike in energy prices, driven by increased global demand as the world recovers from the pandemic and lower-than-expected natural gas deliveries from Russia. Wholesale electricity prices have increased by 200% compared to the 2019 average, according to the European Commission.
“Winter is coming and for many electricity costs are larger than they have been for a decade,” Energy Commissioner Kadri Simson told reporters on Wednesday.
Wholesale gas prices — which have surged to record highs in France, Spain, Germany and Italy — are expected to remain high through the winter. Prices are expected to fall in the spring, but remain higher than the average of past years, according to the Commission. Most EU countries rely on gas-fired power stations to meet electricity demand, and about 40% of that gas comes from Russia, according to Eurostat.
Simson said that the Commission’s initial assessment indicates that Russia’s Gazprom has been fulfilling its long-term contracts “while providing little or no additional supply.”
Kremlin spokesman Dmitry Peskov told journalists on Wednesday that Russia has increased gas supplies to Europe to the maximum possible level under existing contracts, but could not exceed those thresholds. “We can say that Russia is flawlessly fulfilling all contractual obligations,” he said.
Measures EU states can take to help consumers and businesses cope with soaring electricity costs include emergency income support to households to help them pay their energy bills, state aid for companies, and targeted tax reductions. Member states can also temporarily delay bill payments and put in place processes to ensure that no one is disconnected from the grid.
Green energy the solution
The Commission also published a series of longer term measures the bloc should consider to reduce its dependence on fossil fuels and tackle energy price volatility.
“Our immediate priority is to protect Europe’s consumers, especially the most vulnerable,” Simson said. “Second, we want to make our energy system better prepared and more resilient, so we don’t have to face a similar situation in the future,” she added.
This would require speeding up the green energy transition rather than slowing it down, Simson said. “We are not facing an energy price surge because of our climate policy or because renewable energy is expensive. We are facing it because the fossil fuel prices are spiking,” she continued.
“The only long term remedy against demand shocks and price volatility is a transition to a green energy system.”
Simson said she will propose to EU leaders a package of measures to decarbonize Europe’s gas and hydrogen markets by 2050. Other measures to improve energy market stability could include increasing gas storage capacity and buying gas jointly at an EU level.
— Katharina Krebs contributed reporting.
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