Brussels opens the door to establishing limits on gasoline costs to make electrical energy cheaper | Economy | EUROtoday

Even earlier than the bombs fell within the Persian Gulf, the European Commission had made decreasing power costs a high precedence. So now, with the open struggle, the precedence has not grown any extra and President Ursula von der Leyen has indicated this Wednesday a route to achieve that aim wherein a proposal seems that till now didn’t sound good in Brussels: “Limit the price of gas.” The German has dropped this chance earlier than the MEPs when she has listed the options that the European Executive is engaged on to current to the EU leaders on the summit to be held subsequent week.

The record that the German firm has offered begins with “the design of the market”, the so-called marginal system, a mechanism that establishes electrical energy costs primarily based on the costliest technology supply at any given time. That gasoline is normally gasoline. However, the German doesn’t suggest turning it inside out like a sock, moderately she proposes corrections and changes that rectify the defects that at the moment are perceived. “The current design has worked well and there is general support for the system. But it is essential that we reduce the impact on costs when gas sets the price of electricity.”

This is the place he proposes a menu of choices: “Better use of power purchase agreements and contracts for difference, public aid, studying the possibility of subsidizing or limiting the price of gas.” It is just not express, however one of many methods of placing caps on the value of gasoline is the Iberian exception that Spain and Portugal began with lots of diplomatic effort in March 2022, when the power disaster brought on by the Russian invasion of Ukraine worsened. At that point, neither the Commission nor many neighborhood companions facilitated that measure, however ultimately it was seen as successful. Now, when Brussels opens the door to the sort of coverage, it undoubtedly is aware of that there’s a precedent.

It is just not that intervention in power markets is at present anathema. The 2022 disaster drastically modified the methods of coping with these conditions and, actually, an intervention mechanism was already launched available in the market reform that was carried out in 2023. But very demanding situations have been set for it to be activated. The Spanish socialist MEP Nicolás González Casares, one of many audio system and, subsequently, negotiators of that reform by the European Parliament, is aware of it nicely: “What we are seeing seems like a already seen of 2022, which this time could have been avoided. But the European Commission or groups such as the PP or the liberals refused to include, in the latest electricity market reform (EMD), foreseeable temporary intervention measures such as some of those that Von der Leyen is now talking about. Some of us noticed it,” he factors out.

González Casares, nonetheless, is just not now proposing a profound change available in the market guidelines. “The current rules of the electricity market are appropriate to advance electrification with indigenous energies,” factors out the Galician parliamentarian, in an analogous line to that proposed by Von der Leyen or that defended in an article in EL PAÍS days in the past by the vp of the European Commission, Teresa Ribera. The MEP remembers that the reform itself permitted in 2023 already supplied for a evaluation in June of this 12 months.

And as that date approaches, the strain grows, which has been multiplied by the necessity for European corporations to be aggressive (power is cheaper within the United States and China), the rise in electrical energy consumption to advance the decarbonization of the economic system and, now, by what’s pressing: the struggle within the Middle East. This demand may very well be seen on Tuesday within the telematic assembly held by 21 heads of State and Government of the EU. In the statements issued by its organizers (Germany, Italy and Belgium) on the finish of the assembly, which on paper was about competitiveness, it’s famous that “energy prices were identified as a pressing problem on which the next European Council must make decisions.” “The measures must be specific, temporary and well coordinated,” claimed German Chancellor Friedrich Merz.

Both he and the Italian chief, Giorgia Meloni, demand one other measure: “A temporary suspension of the taxation mechanism for carbon emission rights (ETS) on energy production, pending a rapid and broader review.” But on this space, President Von der Leyen appears to be much less receptive. “Without the ETS we would be consuming 100,000 million more cubic meters of gas, which would make us more vulnerable and dependent,” he warned, referring to the truth that the value that should be paid for the rights to emit carbon – plus the prospect of a restriction sooner or later – encourages funding in renewables. Although the pinnacle of the neighborhood Executive is open to “modernizing” it within the evaluation that can also be deliberate for this 12 months.

Along with the “market design” and the evaluation of the ETS, the pinnacle of the neighborhood Executive has put two different strains of labor on the desk: networks and taxes. It defends funding in networks, each new and current ones, in order that the renewable power generated is just not “wasted.” “Let me give you a fact: last year, we installed more than 80 gigawatts of renewables in the EU. A record. But six times more [volumen de energía instalada] “He would not have entry to the networks.”