The president of the Commission spoke of Vladimir Putin’s attempts to manipulate the European energy market
“The time has come to set cap on Russian natural gas prices imported into Europe through pipelines“, said the president of the European Union today Ursula von der Leyen.
As he pointed out, this move is necessary for the EU to deal with them attempts by Russian President Vladimir Putin to manipulate the European energy market.
The ceiling on the price of gas means that the EU will collectively decide on a maximum price, above which it will refuse to buy the Russian energy product.
In the meantime, on On September 9, the EU energy ministers will hold an extraordinary meeting., where in addition to the ceiling they will also discuss the decoupling of the price of electricity from that of gas, while on September 14, von der Leyen will announce the Commission’s proposals.
As it states moneyreviewthe The Commission is examining the two models of the South that are already successfully implemented, the Greek and the Iberian, plus a Greek proposal submitted in July to the Council of Energy Ministers by Kostas Skrekas, in order to formulate its proposals for a common European response to the energy crisis. For the first time during the long and deep energy crisis, the E.U. it appears open to consider all available options for price de-escalation, lifting the protection of the electricity market’s marginal pricing model that it has generously provided throughout the past, supporting the countries of the North against the demands of the South for structural changes.
The Greek model
According to a Commission document cited by Reuters, the E.U. as a measure of direct intervention, it examines the Greek model, which it foresees ceiling per power generation technology at which generators are reimbursed, while the difference from the marginal price determined each time by the expensive natural gas is collected by the state and directed through the Energy Transition Fund (TEM) to subsidies for electricity bills, notes a Kathimerini report.
“An intervention would introduce a price cap for electricity generation technologies that have lower operating costs (incl. lignite, RES, etc.) than gas-fired power plants“, the document states. The aim of the intervention is to separate the commercial returns of said power generation from the current price of electricity, which has soared as a result of soaring natural gas prices. Capping the price of certain technologies could generate financial resources for states, which would then be leveraged by governments by introducing measures to cap retail energy prices for consumers.
The memo, according to Reuters, “presents a first set of measures to optimize the operation of European electricity markets and reduce the impact of gas prices on the prices consumers pay”.
It is noted that the Greek Minister of Energy and Environment, Kostas Skrekas, has already sent letters to its 26 counterparts, in which they describe the Greek proposal for a mechanism to recover excess revenues from power companies, which has been implemented in Greece for two months with significant results. “For August, we have recovered almost 900 million euros from the power generation companies and have led them to the energy transition fund to subsidize the bills of the Greeks,” he said characteristically.
The Iberian model
At the center of the discussions is the Iberian model, which foresees the imposing a ceiling on the price of natural gas used for power generation. The difference with the import price is covered by a special levy imposed on consumers. The cost of compensating the difference between the ceiling and the import price worries both the E.U. as well as many member states. Both models, however, can be implemented immediately and produce results within a month, which is why they are being eagerly considered by the Commission.
skai.gr, RES-MPE
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