“Russia is an unreliable supplier and is manipulating our energy markets.”
With these words, the speech of Ursula von der Leyen, President of the European Commission, begins.
Table of Contents
The current situation
As we are all experiencing, these are extraordinary times, in which we are exposed to astronomic energy prices and market volatility.
Indeed, last week, Ursula von der Leyen, during her statement at the European Commission, explained on one hand the actions that have been already done in the last 6 months by the European Union, and on the other hand, she announced the new measures under discussion to counter the crisis we are facing nowadays.
The actions taken
In fact, significant steps have already been taken so far by the European Union to address the energy crisis situation, such as:
• Demand reduction, so save gas in order to store it. In fact, it was created a join storage, with the goal to reach 80% of gas storage at the end of October: now the storage represents the 82%, so a successful overshoot.
• Diversify away from Russia fossil fuels. The EU stopped the import of Russian coal, leaning on other reliable suppliers, like the USA, Norway, Azerbaijan, Algeria etc. Indeed, Norway is actually delivering more gas to the EU than Russia.
• Massive investments on renewables, our energy insurance for the future, because they are cheap and home-grown.
What is causing energy crisis in europe
In addition to the Russian manipulation of the gas market, that has spilled over to the electricity market, there are other acting factors (like climate change, drought…), that are the reason why we are facing astronomic electricity prices for households and companies and enormous market volatility.
New proposed measures
However, now a set of five “immediate” measures will be proposed, in order to protect vulnerable consumers and businesses and help them adapt:
- Mandatory target to reduce electricity use during the peak hours. There is a global scarcity of energy, so it becomes urgent to save electricity in a smart way.
- Cap on revenues of companies producing electricity with low costs, with the aim of supporting vulnerable people and companies.
- Solidarity contribution for fossil fuel companies: the revenues of fossil fuels companies should be invested to support vulnerable households and companies, but also to invest in clean home-grown energy sources, as the renewables are.
- Liquidity Support for energy utility companies, so they can cope with the volatility of the markets.
- Cap on Russian gas. The EU aims of lowing the price of gas, and therefore it will propose a price cap on Russian gas.