EU plan to decouple electricity and gas prices to lower energy costs in Europe

Ursula von der Leyen details a plan by the EU to decouple electricity and gas prices to lower energy costs in Europe

Ursula von der Leyen, the head of the Community Executive, addressed the EU leaders on Friday, March 11, during a debate on the energy crisis, at the EU Heads of State and Government summit in the French city of Versailles.

In response to the volatility created in the European energy market after Moscow’s military offensive in Ukraine and in view of Europe’s high dependence on Russian gas, Von der Leyen detailed that her team is preparing emergency measures to limit the contagion effect of gas prices on consumers and electricity market prices, with proposals including temporarily limiting prices.

In addition, she explained that the Community Executive is considering the same deadline to set up a special working group to design a supply plan for next winter. This will involve a coordinated operation between the Member States as well as preparing a policy proposal for gas storage at a European level.

At the press conference at the end of the summit, she affirmed that it is considered “feasible” for the EU to dispense with two-thirds of Russian natural gas imports by the end of the year. “It is something doable. It is not a ban on Russian gas, but a reduction”. This implied that there is no intention of closing the taps immediately as a sanction to Moscow.

With a view to May, in the medium term, Von der Leyen explained to the leaders of the Twenty-seven that Brussels plans to present proposals to optimise the design of the electricity market with a view to making structural changes that allow decarbonising the EU mix energy.

She pointed out that in May, the European Commission will present its proposal for the RePower EU plan to end the EU’s dependence on Russian fossil fuels by 2027.

Spain’s President Pedro Sanchez, announced this Friday a tour of European leaders. He will use this to try to unite positions against the rise in electricity prices ahead of the meeting of Heads of State and Government which takes place at the end of March in Brussels.

He avoided giving details of which countries he will visit, but insisted that he will seek to forge alliances on the continent to have a “proposal” against the “irrational” escalation of energy prices.

In his opinion, he said the measures are “not only urgent, but necessary”, and specifically spoke of separating the price of gas from that of electricity, explaining that during the summit, countries such as Belgium, Italy, and Greece have proposed options to cut the “contagion” of gas on the price of electricity, as reported by larazon.es.

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