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ARCHIVED - Brussels approves limiting gas and electricity prices to reduce energy costs
The EC plans to force Spain and other member states to increase gas reserves ahead of next winter
Ahead of the European Council meeting on the energy crisis later this week, the EC has confirmed that it is open to new cost-saving measures, including the “limitation of the price of gas and electricity,” a demand that Spain has been making for months now.
However, the main focus for Brussels is forcing European countries to increase their gas reserves for next winter to avoid a fuel shortage, a feat which can be achieved if the member states pool together their resources and buy in bulk. This means that EU nations can continue offering state aid to companies and consumers affected by the rapidly rising price of electricity.
“The situation is expected to be particularly problematic next winter,” which is when Brussels believes “there could be a risk of insufficient stored gas.”
The EC’s vice president, Maros Sefcovic, said that the Commission “will seek how to limit the prices of electricity and gas and how to mitigate the price of electricity for consumers,” and its decision will determine how far Spain’s President Sánchez needs to go with the tax cuts promised by March 29.
Of course, Spain and many other countries are demanding urgent additional short-term measures, and the Minister of Ecological Transition, Teresa Ribera, has suggested that “the simplest thing is to introduce a maximum reference of the price” at which combined cycle plants – that is, those that generate both electricity and natural gas – can operate, and offer them compensation if and when the cost goes above this ceiling.
In addition to these proposals, the Commission will approve this Wednesday March 23 a temporary framework of State aid “to support the economy after the invasion of Ukraine by Russia”, which suggests that member nations subsidise companies and private customers through funding or official credits, which would essentially be an extension of the tax cuts first introduced last October in Spain.
Ms Ribera already quipped that these measures have become obsolete in the face of a global energy crisis, but state aid, guarantees and credits are the best options the EC has put forward thus far to deal with the “severe increase in gas and electricity prices.” The Commission is still holding out on Spain’s proposal of decoupling the costs of gas and electricity.
Image: Wikimedia Commons
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