The European Union is urgently working on a plan to rein in electricity prices that have been soaring for months as a consequence of Russia’s invasion of Ukraine, the EU president said.
Ursula von der Leyen made the comments Monday at the Bled Strategy Summit in Slovenia. “Skyrocketing electricity prices are now exposing the limitations of our current market design. It was developed for different situations. This is why we are now undertaking urgent interventions and structural reforms to the electricity market,” she tweeted.
Von der Leyen didn’t include any details in the comments, but the presentation coincided with Germany’s 2023 European benchmark electricity price hitting a new record, soaring above 1,000 euros ($993) a week one. Prices in France reached this high on Friday.
She said the region needs “new strategic thinking to defend the rules-based order”, which should start with ending reliance on Russian fossil fuels, which the EU has been scrambling to do this winter .
“Our increased demand for other raw materials cannot create new dependencies. We must diversify our supply and connect with reliable partners,” she added, noting that she will Arrives in Canada two weeks later to help advance the partnership with the country.
The Czech Republic, which currently holds the EU Presidency, has called for a special meeting of energy ministers on 9 September. The country’s Prime Minister Petr Fiala reportedly said on Monday that “decoupling electricity prices from gas costs is one of the avenues we can consider” to reduce soaring electricity costs.
German Chancellor Olaf Schultz failed to secure a commitment from Canada to deliver LNG to Europe last week, but his country got a deal from Denmark to increase offshore wind supply and It is connected to the German grid. Offshore wind capacity in the Baltic Sea is expected to power 4.5 million European homes by 2030.
The here and now remains a problem for Europe, although after a summer heatwave and drought that threatened crops, it is now a winter for its citizens, if countries do not take enough measures, which could mean a power outage except for gas. Germany, one of the countries that has been cutting consumption and telling citizens to save energy, appears to be hitting its gas-saving goals.
Gas pressure weighs on electricity In the region, as well as in the UK, energy regulators have raised the country’s price cap by 80% to £3,549 ($4,200) a year.
In the short term, Europe faces fresh fears of another shutdown of the critical Nord Stream 1 gas pipeline due to three days of maintenance from 31 August to 2 September. Concerned that Russia might use the shutdown as an excuse not to restore flows, EU leaders have not discounted their efforts to reduce their reliance on Moscow.
Moscow has cut pipeline deliveries to 20% of maximum capacity, blaming problems with turbines. Europe has accused Russia of restricting supplies to Europe in retaliation for sanctions imposed by its nearly six-month invasion of Ukraine.