EU plans emergency action to halt energy price rise

The European Union is preparing to take emergency action to reform the electricity market and get a grip on energy prices that have soared since the start of Russia-Ukraine war, senior officials said on Monday.

Energy ministers from EU member states will hold urgent talks in Brussels on September 9.

High gas prices have been followed by disruptions in the nuclear and hydroelectric sectors amid a heatwave blamed on climate change — threatening businesses and households with massive bills.

“The skyrocketing electricity prices are now exposing the limitations of our current electricity market design,” EU Commission president Ursula von der Leyen told a forum in Bled, Slovenia.

“It was developed for different circumstances. That’s why we are now working on an emergency intervention and a structural reform of the electricity market.”

Separately, Germany’s Chancellor Olaf Scholz also called for action.

Speaking at a press conference after talks with Czech Prime Minister Petr Fiala, Scholz said that “we are in complete agreement that rapid action has to be taken” to reform the market.

“My impression is, I think our common impression is, that this will now succeed more quickly across Europe than under other framework conditions,” he said.

The Czech Republic holds the rotating presidency of the European Union, and it was Czech Industry and Trade Minister Jozef Sikela who announced next week’s emergency talks.

“We must fix the energy market. Solution on the EU level is by far the best we have,” he said.

The European Commission has yet to publish a detailed plan for market reform, but some member states have been pushing for a temporary cap on wholesale gas prices.

EU officials are also considering measures to split electricity price setting from the gas price and take into account other energy sources.

Some member states have launched price reduction measures of their own, but Brussels believes EU capitals working together will be more effective.

“The main thing we have to do is to separate electricity prices from power prices and hence prevent Putin from dictating electricity prices to Europe by tampering with gas supplies,” Sikela said.

“Therefore one of the proposals we are coming up with is putting a ceiling on prices of gas used in the production of electricity. This will be a functional and less costly solution that should reduce prices.”

Some member countries, however, have had carve-outs from strictly following the rules as they are too dependent on Russian supplies.