Simson later presented a toolbox of "temporary and targeted" measures, such as direct income support for vulnerable households, state aid for struggling companies and tax reductions, that member states can introduce at national level to palliate price shocks.
Over 20 countries have announced their intention to use some or all of these tools. In response to growing criticism around the European Green Deal, Simson insisted that the only viable solutions to avoid price crisis in the future was to switch to renewable power sources, which are homegrown, independent and much cheaper.
As part of the Green Deal, Brussels is urging EU countries to step up renovation of buildings so they can be better prepared for extreme weather, such as cold snaps and heatwaves, and therefore lessen the intensive use of heating and cooling systems.
Among the draft laws is the creation of a new, standalone Emissions Trade System to cover the polluting fuel used for heating buildings and road transport. The idea received a mixed response , with some legislators immediately coming forward to reject it for its potential damage to the middle class. The Commission, which continues to underline that all carbon must be taxed no matter the source or reason behind it, is now preparing to enter negotiations on the legislative files with the European Parliament and the EU Council, a debate that is already being influenced by the worsening price crisis.
It's actually our dependence on fossil fuels, like petrol and natural gas, which makes our energy bills much more expensive," he told Euronews.
The problem [is the] peaks of natural gas and petrol. This is where the increase in electricity prices come from. And there is a simple or technical reason for this: in times of high demand for electricity, coal and gas power plants need to be switched on to feed into the system.
And gas and coal come at a much higher price than renewables to produce electricity. The EU's exposure to volatile energy prices is poised to remain a risk in the coming years before the green shift brings the anticipated stability to the market.
In the meantime, governments will have to come up with interim solutions, such as lowering the tax rates and extra levies applied to energy bills, which in some countries can make up half of the final price.
The Spanish government has temporarily cut the special electricity tax from 5. Other measures can include social programmes to protect vulnerable households and small businesses, alleviate energy poverty and prevent families from having their electricity supplies cut off. In , about 34 million Europeans said they were unable to keep their homes adequately warm.
Renegotiating the contract with electricity providers can give consumers a lifeline. Fixed-price contracts help ensure a consistent and predictable price, even if the price doesn't fully reflect the market's reality or the client's actual consumption.
I think those [failed] companies were hoping that if prices fell, they could scoop up customers with a bargain, if they rose then they'd be able to batten down the hatches and see through the crisis. This crisis is so great no one could weather it if they weren't hedged. Jackson suggested that the stress tests carried out in the banking sector ought to be applied in the energy sector to ensure companies were operating responsibly.
We don't want to stall competition when competition is between companies behaving responsibly. Jackson added: "What we now need to do is make sure that competition is on the basis of companies being well run, having low costs because they're being efficient and using technology, rather than because they're gambling in the market. Rising gas prices aren't a problem unique to Britain.
In recent weeks, governments in Spain, Italy, Greece, and France have taken drastic actions to minimize its impact on consumers. French lawmakers are pushing for the EU to become less dependent on natural gas from external markets.
Most of the bloc's supplies come from Russia and Norway. Plus, Europe is decreasing their domestic production of natural gas. Europe's top domestic producer of natural gas, the Netherlands, began phasing out their main gas field Groningen in We are not prepared, well prepared to navigate the winter season, which is the heating system.
So that is the concern that is driving up prices," said Tagliapietra. There have been concerns that Russia could be using the crisis to lobby for the newly completed Nord Stream 2 pipeline to come online by not sending more natural gas for Europe's storage.
The International Energy Agency IEA said that Russian exports to the EU were down from their levels and that "Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season".
Forty members of the European Parliament recently called on the Commission to launch an investigation into whether Gazprom was withholding natural gas to push approval of the Nord Stream 2 pipeline.
A Kremlin spokesman said in mid-September that the commissioning of the new pipeline would "substantially balance" the price of natural gas in Europe, further increasing suspicions that Russia could be withholding gas on purpose.
Expensive gas also likely points to higher prices for plastics. In a Sept. But they warn that one severe winter storm could easily throw the market off balance yet again. By providing your email, you agree to the Quartz Privacy Policy. Skip to navigation Skip to content.
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