The European Union will jointly purchase gas and ensure that stocks are replenished to 80 percent next winter in order to be less dependent on market disruptions and to dampen the price as much as possible. The EU heads of government decided this on Friday evening on the second day of their summit in Brussels after a long debate about the possibilities of doing something about high energy prices.
The European Commission was commissioned to study whether it is possible to decouple the gas market from the electricity market. She is due to present those conclusions in May.
Reaching a compromise was not easy. The southern Member States, led by Spain, have been pushing for some time to intervene in the market to artificially lower the price. The liberal northern countries, led by Germany and the Netherlands, saw nothing in this.
The Commission has already examined a number of options, but concluded that each intervention has its own drawbacks. She is now given the task of examining the effects of these measures in the Member States. This concerns measures such as state aid and direct support for consumers through vouchers and price limits.
Spain and Portugal will have the right to treat the Iberian Peninsula as a separate part of the market, said Commission President Ursula von der Leyen during a press conference afterwards. Spanish Prime Minister Pedro Sanchez said: “We achieved our goal during this European Council. Spain and Portugal can take exceptional measures from today to bring energy prices down.” The intention is that the measures will not disrupt the European energy market.
Disruptions
Spain and Portugal generate quite a lot of renewable energy and are relatively autonomous within the EU. It is therefore expected that the measures they take will not lead to major disruptions in the European energy market in the near future.
Their powers are linked to a whole series of strict conditions, such as supervision by the European Commission.
In doing so, the Commission will ensure that the measures lead to a fall in the electricity price for consumers and businesses are not adversely affected. Moreover, the measures must be temporary in nature.
French President Macron underlined that the European Commission will be given a leading role in interventions in the energy market. According to Macron, it should become clear in the coming weeks when the measures will take effect. Spain and Portugal said they could start immediately.
The prices of gas and electricity are historically linked. This is disadvantageous for Spain and France because they have a lot of renewable energy and nuclear energy.
“The discussion makes it clear that there is no single European energy market that is the same in all respects,” Prime Minister Mark Rutte said Friday evening after the summit. “What we are going to do now is have a conversation where all options are on the table.”
A version of this article also appeared in NRC Handelsblad of 26 March 2022
A version of this article also appeared in NRC on the morning of March 26, 2022