The European Union said on Wednesday it would scrutinise its power market design and consider proposals to revamp EU regulation, as the bloc seeks to keep its plans to tackle climate change on track amid record-high energy costs, according to Reuters.
European electricity and gas prices have rocketed higher this year as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic.
Soaring energy prices topped the EU’s political agenda on Wednesday, with environment ministers and European Parliament each meeting to debate the issue, after EU country leaders discussed their response on Tuesday evening.
“There is no question that we need to take policy measures,” EU energy commissioner Kadri Simson told the EU’s parliament.
The crisis has divided countries over whether Brussels should intervene. The Commission will next week publish a menu of options for how governments and the EU could react.
Simson said the Commission would launch a study into whether the EU’s power market was fit to deliver the bloc’s planned transition to green energy. Spain and France have called for a revamp of EU electricity regulation to decouple the price of power from the cost of gas.
Not all countries are convinced. EU regulators expect gas market conditions to ease in spring and some governments say the issue is best treated with national subsidies and tax breaks to cushion consumers from high bills – measures many countries have rolled out.
The price spike has arrived as the EU prepares for a major upgrade of climate policies, stoking concerns among poorer central and eastern EU states that steps to increase the cost of polluting fuels could push more households into energy poverty.
Brussels is determined to ensure the price spike will not derail its plan to slash emissions and has proposed a multi-billion-euro fund to help poorer households invest in green options.
“The problem here is the climate crisis. (…)The quicker we move towards renewable energy, the quicker we can protect our citizens against high prices,” EU climate policy chief Frans Timmermans said.