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Brussels will activate the emergency intervention of the electricity market in a matter of “weeks”

The emergency intervention in the European electricity market announced by Ursula von der Leyen to stop the unstoppable rise in prices will be activated in a matter of “weeks”. But the in-depth reform of the pricing model will not arrive until early 2023 due to the complexity of the system, as confirmed by the European Commission on Tuesday.

The president said this Monday by surprise that the Community Executive works in two different initiatives with a common goal: to curb the “exorbitant prices” of electricity. Firstly, Brussels will propose an “emergency intervention” of the market, which will be followed later by a “structural reform” of the current pricing model, in which gas is what determines the price of electricity.

His spokesman has specified this Tuesday the calendar that the Commission manages to present its proposals: “For the first it is a matter of weeks. The in-depth reform will arrive at the beginning of next year”, he explained. However, he has not clarified whether the urgent intervention plan will arrive in time for the extraordinary meeting of energy ministers convened for September 9 in Brussels.

[Von der Leyen anuncia una “intervención de emergencia” en el mercado eléctrico por los precios disparados]

“We have to balance two elements. On the one hand, the seriousness of the situation and the impact on consumers and industry. But also the need to present proposals that are adjusted to the complexity of our electricity market. It is important to take the necessary time so that our proposals respond to these dimensions,” said the spokesman. Brussels is also consulting with all the Member States, which are the ones with the main powers in the field of energy.

The Community Executive has not wanted to give any details about the content of its proposals. During a colloquium in Berlin on Monday night, Von der Leyen explained that the priority objective is prevent skyrocketing gas prices from spreading to electricity.

“We have to develop an instrument that guarantees that the price of gas ceases to dominate the price of electricity“, maintains the president. “We have to guarantee that renewable energies are generated at lower costs, that these costs are passed on to consumers and that the extraordinary benefits are used to help vulnerable households,” said Von der Leyen.

“The Commission works on a system that is extremely complex, which requires defining proposals that can respond to the challenges we face, without eliminating the advantages and political objectives that we pursue: the increase of renewables in Europe or the reduction of demand for gas”, insisted its spokesman.

The Community Executive had so far refused to reform the electricity pricing model, despite the fact that countries such as Spain, Portugal, France or Italy have been calling for it for almost a year. Why has he changed his position now?

Brussels argues that the situation has completely changed because of the war in Ukraine and because of the Kremlin’s energy blackmail, which translates into “increasingly frequent interruptions of supply arriving from Russia”. To this we must add that the EU has decided to do without Russian fossil fuels completely and that renewables have an increasing weight in the energy basket of all Member States.

However, the Community Executive defends that it has acted since Spain and Portugal began to claim it, with measures such as the “Iberian exception”, which was approved at the March European Council.

Russia-Ukraine War

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