It is not only in Austria and Germany that the state has to support financially troubled energy suppliers with billions of aid. Electricity and gas companies are also experiencing turbulence in other EU countries. In light of these developments, Commission chief Ursula von der Leyen has now announced a reform of the EU’s electricity market.
“The skyrocketing electricity prices show the limits of our current electricity market design for several reasons,” she said at a conference in Slovenia on Monday. The system has been developed for different conditions and is no longer suitable. “That is why we are now working on an emergency measure and on a structural reform of the electricity market,” continues von der Leyen.
The so-called merit order system the EU determines price development through the order of use the power plants. Those that can produce electricity cheaply are used first to meet demand. These are, for example, wind turbines. In the end it is aimed the However, the price is based on the last switched on, and thus the most expensive, to meet the demand – these are currently the gas-fired stations. Because the prices are particularly high, renewable energy providers achieve very high profits as a result. The system was originally intended to create an incentive for investment in renewable energy.
Scholz: Electricity prices no longer reflect production costs
Meanwhile, German Chancellor Olaf Scholz and Czech Prime Minister Petr Fiala have announced EU measures to combat high electricity prices. For example, Austrian Chancellor Karl Nehammer called again on Sunday. There is no need for countries to take national measures, Scholz said on Monday during a visit to Prague.
It is clear that electricity prices no longer reflect production costs, and therefore structures need to be reformed. Fiala announced a special meeting of EU energy ministers in Brussels on 9 September. He consulted von der Leyen in the morning. A conceivable measure is to decouple the calculation of the electricity price from gas.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
