Kate Abnett and Tom Käckenhoff
BRUSSELS/DUSSELDORF (Reuters) – EU executives on Wednesday outlined fundraising over 140 billion euros ($140 billion dollars) to deal with the energy crisis, which has increased the likelihood of winter fuel rationing, business bankruptcies and recessions.
European gas prices have soared this year as Russia cut fuel exports in retaliation for Western sanctions over its invasion of Ukraine, leaving households struggling to pay energy bills and utilities coping with a liquidity crunch.
Governments across Europe have taken a range of measures, from capping the price of consumer electricity and gas bills to providing credit and guarantees to prevent electricity providers from collapsing under the weight of collateral demand.
“EU member states have invested billions of euros in helping vulnerable families. But we know it’s not enough,” said President Ursula von der Leyen, member of the European Parliament of the European Commission.
She unveiled plans to cap the revenue of generators that get from soaring electricity prices but don’t rely on expensive natural gas. She also outlined plans to force fossil fuel companies to share in windfall profits from energy sales. ,” said Von der Leyen.
She said the plan should raise more than 140 billion euros for the EU 1230 members who support households and businesses.
But her statement did not include the idea of an earlier EU cap on Russian gas prices. Russia warned of possible cuts to all fuel supplies The idea has since divided member states. Von der Leyen said the committee was still discussing the idea.
The benchmark gas price in Europe rose to About 208 euros per megawatt hour (MWh) in comments, well below the record of more than 343 euros set in August, but better than a 200% higher than a year ago.
Full details of the European Commission proposal will be around GMT 1230 Announcement. The draft proposal seen by Reuters did not include a broader gas price cap.
Europe has been racing to replenish its storage facilities and has already met its goal of having them 80% is full by November. But Russia’s moves to cut supply, including through the main Nord Stream 1 pipeline to Germany, have made winter prospects uncertain. Moscow blames sanctions for hindering pipeline maintenance European politicians called it an excuse.
“Months of geopolitical battles have battered European gas markets, with price volatility stemming from supply shortages, potential market intervention and wider uncertainty.” sex,” said Rystad analyst Luo Zongqiang. Consumer prices have risen due to the national price cap policy.
“We want to avoid bankruptcy. I have to warn that if individual companies are allowed to go bankrupt, it may become more difficult to fund the activities of all,” VKU managing director Ingbert Liebing told Reuters, adding that the group was in talks with the German government.
French grid operator RTE said there was no risk of complete blackouts in winter, but did not rule out some outages during peak hours, saying it was crucial to reduce demand.
It means reducing national electricity consumption by 1% to 5% in most cases and up to a maximum in extreme cases 15% gas shortages and very cold weather can help avoid a power crunch.
“As a last resort, organized, temporary and rotating load shedding can be initiated to avoid There have been widespread incidents,” RTE said.
European regulators are looking into other remedies.
“We also know that energy companies face serious risks in the electricity futures market. liquidity issues that could jeopardize normal operations. von der Leyen said.
“We will work with market regulators to mitigate these issues by revising collateral rules – and taking steps to limit intraday price volatility.”
Utilities typically Electricity will be sold in advance, but collateral must be provided to the clearing house before the electricity is provided to prevent default. As the price of natural gas has soared, so has the demand for collateral.
German utility Uniper, which has secured 13 a billion euros in credit from the state’s lines, most of which have been Delineation, which said on Wednesday, was looking at alternative routes to maintain operations, including possibly handing a larger stake to the government. Under the existing bailout plan, the state will take 13%.
“Nationalisation is the only source close to the matter,” told Reuters. Said talks with the German government are continuing. Negotiate comment.