The soaring energy prices are a stark reminder of how much Europe relies on fossil fuels and should accelerate the shift to new forms of energy.
“Today’s experience of rising energy prices is a clear warning… that we must accelerate the transition to clean energy, breaking away from dependence on fossil fuels,” a senior EU official told reporters as the European Commission unveiled a series of measures aimed at to overcome the crisis.
The European Union is facing a sharp spike in energy prices, driven by increased global demand as the world recovers from the pandemic and lower-than-expected shipments of natural gas from Russia.
Wholesale electricity prices have increased 200% compared to the 2019 average, according to the European Commission.
“Winter is coming and for many electricity costs are greater than for a decade,” Energy Commissioner Kadri Samson told reporters Wednesday.
Wholesale gas prices – which have soared to record highs in France, Spain, Germany and Italy – are expected to remain high throughout the winter.
Prices are expected to fall in the spring, but remain higher than last year’s average, according to the Commission. Most EU countries rely on gas-fired power plants to meet electricity demand, and about 40% of that gas comes from Russia, according to Eurostat.
Samson said that the Commission’s initial assessment showed that Russia’s Gazprom had fulfilled its long-term contract “while providing little or no additional supply.”
Kremlin spokesman Dmitry Peskov told reporters on Wednesday that Russia had increased gas supplies to Europe to the maximum level possible under existing contracts, but could not exceed that threshold. “We can say that Russia fulfilled all contractual obligations perfectly,” he said.
Steps EU countries can take to help consumers and businesses cope with soaring electricity costs include emergency income support for households to help them pay their energy bills, state assistance to companies, and targeted tax reductions.
Member states can also temporarily suspend bill payments and implement processes to ensure that nothing is disconnected from the network.
Green energy is the solution
The Commission also published a series of long-term actions that the bloc should consider to reduce its dependence on fossil fuels and address volatility in energy prices.
“Our immediate priority is protecting European consumers, especially the most vulnerable,” said Samson. “Secondly, we want to make our energy system more prepared and more resilient, so that we don’t have to face a similar situation in the future,” he added.
This will require accelerating the green energy transition rather than slowing it down, said Samson. “We are not facing a spike in energy prices because of our climate policies or because renewable energy is expensive. We are facing it because fossil fuel prices are soaring,” he continued.
“The only long-term solution to demand shocks and price volatility is a transition to a green energy system.”
Samson said he would propose to EU leaders a package of actions to decarbonize Europe’s gas and hydrogen markets by 2050. Other measures to improve energy market stability could include increasing gas storage capacity and co-purchasing gas at the EU level.