EU vows emergency plans to tackle energy costs after Ukraine invasion

Brussels is engaged on emergency measures to curb hovering family vitality payments following Russia’s invasion of Ukraine.

Ursula von der Leyen, European Fee president, promised to convey ahead concepts for attainable controls on vitality costs and strategies of damping the impact of surging gasoline costs on electrical energy prices, in an EU summit in Versailles the place leaders agreed to drastically cut back dependence on imported Russian oil and gasoline.

“By the tip of this month the fee will current choices to restrict the contagion impact of the rise of gasoline costs to electrical energy costs,” she stated, including that the fee was additionally taking a look at the way to enable state support to go to struggling companies.

Member states together with France, Italy, Greece, Spain, Belgium and Romania favour methods to restrict the hyperlink between gasoline and electrical energy fees given the latest spike in costs. Different capitals are reluctant to again heavy intervention that may disrupt EU vitality markets.

Italy, Spain, Belgium and a few others additionally need the power to cap costs however face opposition.

EU leaders met for a casual summit in Versailles hosted by Emmanuel Macron, the president of France who holds the EU’s rotating presidency, to debate the financial and defence response to the struggle in Ukraine.

They agreed to “part out our dependency on Russian gasoline, oil and coal imports as quickly as attainable” by growing imports of LNG from different markets, growing a European hydrogen market, enhancing vitality effectivity and accelerating investments in renewable vitality.

Von der Leyen stated a plan can be introduced by mid-Might to part out dependence on Russian vitality by 2027, though member states differ on whether or not that is possible.

She stated it was “do ready” to chop imports from Russia by two-thirds by the tip of this yr, as outlined in a fee plan this week. It additionally included the power to subsidise client payments via a windfall tax on utilities, that are anticipated to make €200bn in further revenue this yr.

The EU’s vitality pricing system operates on a “pay as you clear” mannequin during which wholesale electrical energy prices mirror the value of the final unit of vitality purchased by way of auctions held in member states. Typically gasoline is the gasoline that’s wanted to ensure sufficient vitality is provided to fulfill demand and subsequently drives the value, even in nations reminiscent of France the place cheaper nuclear energy gives about 70 per cent of electrical energy.

This week Bruno Le Maire, finance minister of France, stated the concept that carbon-free electrical energy costs ought to nonetheless rely upon fossil gasoline costs should change. “The extra gasoline costs rise, the extra this actuality is apparent to everybody,” he added.

Mario Draghi, Italy’s prime minister, stated after the summit: “As we speak there is just one worth, so electrical energy produced at a really low price — like that from renewable sources — reaches the buyer on the identical worth as that produced from gasoline . . . That is the principle reason for rising electrical energy payments.”

EU leaders additionally backed steps to refill gasoline storage capability as their consideration turns to the danger of disruptions in Russian provides forward of subsequent winter. The fee will suggest that underground gasoline storage websites be crammed to 90 per cent capability by October every year.

Further reporting by Andy Bounds in Brussels, Eleni Varvitsioti in Athens and Amy Kazmin in Rome