They bet on measures that can be approved quickly and that do not endanger energy security
As energy prices continue to climb, the European Union (EU) debates the best way to deal with this serious situation. The Energy Ministers of the Twenty-seven met yesterday in Brussels with the aim of bringing positions closer together and approving urgent measures that can be applied as soon as possible. That urgency is double-edged, as it may force the most difficult decisions such as the cap on Russian gas and mandatory electricity demand reductions to be left behind, which do not have the support of all European countries. There is consensus, yes, in taxing the supervening benefits of renewables and nuclear, in applying a solidarity rate to fossil fuel energy companies and in approving a liquidity mechanism for energy companies.
Yesterday's meeting served definitively to gauge support for possible European emergency measures. "It has not been an easy debate, but we agree that urgent action is needed and we are ready to work quickly," stressed the Czech Minister for Industry, Jozef Sikela, speaking on behalf of the EU Presidency.
The cap on Russian gas is the most important measure in the package presented by the European Commission last week, but also the most thorny so it could finally be left out of the legislative proposal that will be presented next week. "We have to continue working to design the best way to do it," Energy Commissioner Kadri Simson slipped on this mechanism.
Recession and supply
Despite the EU has reduced the import of Russian gas to 9% and that its energy reserves are already close to 83%, the bloc fears Moscow's total cut in the face of a possible price limit. In fact, several organizations - including the Commission and the European Central Bank - have warned this week of the possibility that Europe will enter a recession if Russia completely cuts off supply.
Within the bloc there are also countries that are reluctant to limit the price of gas that comes from this country, so the debate could get stuck in the European Council. Brussels put on the table a cap on all gas imported into Europe, regardless of its origin, but the initiative is still too green for approval. In the worst case scenario, such a cap could compromise the continent's energy security. As Simson herself acknowledged, the EU “must analyze the consequences of a measure of this type (...). There is fierce competition in the LNG market."
Energy efficiency and consumption savings have been two of the big bets of Brussels for the winter. The European Commission highlighted the importance of reducing electricity consumption in a coordinated manner, especially at peak times, when combined cycle power plants enter the market. European countries, on the other hand, are betting on voluntary reductions in demand.
The Community Executive hopes to make progress in the time remaining in this discussion and counts on receiving the support of the Member States to limit consumption by 5% during peak hours. Czech Minister Sikela explained that next week's final proposal will foreseeably contain a series of voluntary measures and "a trigger point" that would force states to apply those measures.
Where there does not seem to be discussion is in setting a limit to the supervening benefits of renewables and nuclear. The idea is that this money remains in the hands of the countries so that it is used to protect vulnerable homes and businesses. In the same way, they are committed to creating a solidarity mechanism so that the profits of fossil energy companies can also be used for this purpose. Support was also widespread for the creation of liquidity and rescue mechanisms for energy companies.