Rising energy prices

On Wednesday, the European Union said it would review its power market design and investigate recommendations to modify EU regulation to keep its climate change ambitions on track despite record-high energy prices.

Electricity and gas prices in Europe have skyrocketed this year as constrained gas supplies combine with robust demand in economies emerging from the COVID-19 pandemic.

Soaring energy prices dominated the EU’s political agenda on Wednesday, with environment ministers and the European Parliament meeting to tackle the matter, following a discussion of EU leaders on Tuesday evening. There is no doubt that EU energy commissioner Kadri Simson told the EU parliament that policy actions are required.

Countries are divided on whether Brussels should intervene in the issue. The Commission will release a menu of alternatives for how governments and the EU can respond next week.

Simson stated that the Commission would conduct a study to determine if the EU’s power market is ready to support the bloc’s planned transition to green energy. Spain and France have urged for a rethinking of EU electricity policy to isolate power prices from gas prices. We believe this structure is sound,” Simson added, “but we see obstacles.

The EU prepares for a significant overhaul of climate rules

Spanish Prime Minister Pedro Sanchez said his country and others had requested Brussels for an “audacious” response. 

Not all countries are persuaded. EU regulators expect gas market conditions to improve in the spring. Some governments believe that national subsidies and tax breaks are the best way to protect consumers from high bills, which numerous nations have implemented.

It’s a matter for the member states to deal with,” Dutch Prime Minister Mark Rutte stated. We should consider what Europe can accomplish as a whole. There are proposals, some more daring than others.” The price increase comes as the EU prepares for a significant overhaul of climate rules, raising fears among poorer central and eastern EU members that attempts to raise the cost of polluting fuels could push more households into energy poverty.

Brussels is determined that the price increase will not derail its aim to reduce emissions. It has suggested a multi-billion-euro fund to assist low-income households in investing in green alternatives. The climate crisis is the issue here, “Frans Timmermans, the EU’s climate policy chief, stated. The faster we move toward renewable energy, the sooner we can safeguard our population from rising prices.