Germany and 8 other Northern European countries reject the reform of the electricity market

Germany, Austria, Holland and six other northern European countries join forces and reject an ad hoc reform of the wholesale electricity market as demanded by the Government of Pedro Sánchez to stop the escalating electricity prices. In a statement signed this Monday, on the eve of the extraordinary meeting of energy ministers to be held this Tuesday in Luxembourg, the nine member states recalled that the gas and electricity markets have been built together in recent decades and have asked the rest of European governments for prudence before interfering in the design of energy markets.

“We share the analysis of the European Commission that the causes of the current rise in prices are mainly due to the encouraging world economic recovery and factors such as a greater demand and supply of fossil fuels but not to the design of energy markets or climate policy & rdquor ;, indicates the text that they also sign Denmark, Finland, Estonia, Latvia, Ireland and Luxembourg.

Ahead of tomorrow’s meeting of 🇪🇺 EU #Energy Ministers on #EnergyPrices, Germany 🇩🇪 as well as 🇱🇺🇦🇹🇩🇰🇪🇪🇫🇮🇮🇪🇱🇻 & 🇳🇱 publish a joint statement in support of the internal energy market and the @EU_Commission’s #toolbox. @EU2021SI @BMWi_Bund #TTE

Read our joint statement👇 pic.twitter.com/GvyDfnv4oJ

— Germany in the EU (@germanyintheeu) October 25, 2021

In their opinion, the best way to deal with the situation short termAs the Community Executive has recently proposed in its toolbox presented on October 13, it is with “temporary & rdquor; and “selective & rdquor; at the national level to protect the most vulnerable consumers and businesses. “These measures should be able to be easily adjusted in spring, when the situation is expected to return to medium levels,” they value.

Medium term The solution, according to Berlin and the bulk of capitals in the north of the European continent, involves energy efficiency measures and an accelerated deployment of renewable energies. For this, they see it vital to implement as soon as possible the measures included in the EU’s Fitfor55 climate package to reduce CO2 emissions and achieve climate neutrality by 2050. “A well-managed energy transition is not the cause but part of the solution to maintain affordable and predictable prices & rdquor ;, they argue in clear disagreement with the position held by Poland or Hungary, who precisely attribute the energy crisis that also affects their countries to the emission reduction targets.

15% interconnections

According to the diagnosis of the 9 countries that sign the letter, the domestic gas and electricity market has been built jointly and gradually in recent decades and “given that price peaks are due to global factors & rdquor; consider that extreme care must be taken “before interfering in the design of internal energy markets & rdquor; because “this will not be a solution to mitigate the current price boom that is linked to the fossil fuel markets,” they point out.

According to The Hague, Vienna, Berlin and the rest of the northern capitals, “we need well-integrated energy markets in the EU, functioning with market mechanisms and good interconnections as part of the solution to strengthen resilience to shocks from prices & rdquor ;, they claim. The best approach to this, they estimate, is to raise the percentage of interconnections at 15% by 2030 and greater integration of the electricity market.

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“Transparent and competitive energy markets generate efficiency and price competitiveness for end users. Therefore we cannot support any measure that conflicts with the internal gas and electricity market, for example, an ad hoc reform of the wholesale electricity market & rdquor ;, they conclude on one of the central elements of the proposal presented by the vice presidents Nadia Calvin and Teresa Ribera last September to break the link between gas and electricity that makes the most expensive technology, gas in this case, the one that determines the price of electricity.

Although the idea was not included in the box of proposals presented by Brussels, the European Commission has asked the Agency for the Cooperation of Energy Regulators of the EU (ACER) a study on the operation of the electricity market. The preliminary report will arrive in mid-November but the final report will not be ready until April 2022. Meanwhile, the Twenty-seven will continue to burn stages in a debate that is going to be long and very divisive, as was clear at the European Council held on the last week.