Energy Commissioner: coordinated EU intervention needed

The energy market is under extreme strain, the situation is unsustainable and a coordinated EU-level intervention is needed, EU Energy Commissioner Kadri Simson told the European Parliament plenary on Tuesday.

Speaking in the debate on the EU’s response to rising energy prices in Europe, the Commissioner said the Commission’s proposal was to reduce electricity consumption in order to achieve a more balanced market. EU member states should set a binding target to reduce energy consumption at peak times, thereby reducing pressure on electricity generation, including gas consumption, which will have a positive impact on prices. He added that the EU would give member states flexibility to design the measures they consider appropriate.

He said that it is often the generators with high cost margins that set the final price of electricity sold at full price, with the companies generating electricity at lower cost benefiting, but final consumers not getting this advantage. The Commission would introduce an EU-wide cap on the remuneration of low-carbon technologies. He added that companies making big profits could either invest their profits in clean energy or support vulnerable industries in a spirit of solidarity.

Mr Simson stressed that there is no magic bullet to bring prices back to pre-war levels, but a targeted package of measures can help people. He said the panel was also looking at how stronger intervention could be used to achieve lower prices while maintaining security of supply.

He also added that a European price cap would reduce the risk of manipulation, but the negative effects of this still need to be analysed in some member states.

In a press release, Fidesz MEP András Gyürk stressed that while reasonable and effective measures could be expected from the European Commission, “Brussels is late, its sanctions have backfired and its new proposals are irresponsible and absurd”.

According to the MEP, energy prices have risen dramatically but “Brussels is not up to the task” of tackling the problem. “The Commission has stood idly by while gas and electricity prices rose in the summer. Its new proposals are inadequate and will not solve the crisis. And a price cap on imported gas would further reduce the already tight supply of natural gas, which would be a completely absurd idea on the eve of the heating season,” the Fidesz politician pointed out.

In his opinion, the sanctions against Russia have weakened the European economy, contrary to what was expected. “Instead of imposing new sanctions and expanding its own powers, Brussels should finally focus on helping European industry, small and medium-sized enterprises and citizens,” András Gyürk said.