If governments do nothing to bring down the price of natural gas, EU countries will face five to ten harsh winters, warned Belgium’s energy minister. Gas price caps and decoupling from electricity prices are being advocated for across the EU.
Since Russia’s invasion of Ukraine in February, which triggered sanctions, EU states have been grappling with massive energy price increases. Countries that support Ukraine are attempting to reduce their reliance on Russian gas and oil imports.
Russia, which supplied 40 per cent of the EU’s gas last year, has now restricted supplies.
Tinne Van der Straeten, Belgium’s Energy Minister, wrote on Twitter that gas prices in Europe needed to be frozen immediately, and that the link between gas and electricity prices was artificial and needed to be reformed.
“The next five to 10 winters will be terrible if we don’t do anything,” she said. “We must act at source, at European level, and work to freeze gas prices.”
Electricity prices in Europe have also been rising, reaching new highs this week.
“We have to stop this madness that is happening right now on energy markets,” Austria’s Chancellor Karl Nehammer said.
Electricity prices must fall, he declared, urging the EU to decouple electricity and gas prices.
“We cannot let [Russian President Vladimir] Putin determine the European electricity price every day,” he added.
Natural gas is still widely used in power generation. This is more expensive because gas prices have risen. Significantly, this price is used when purchasing wholesale electricity, even when it comes from much cheaper renewable sources.
Despite Russia cutting deliveries, Germany, the largest importer of Russian gas in 2020, has been racing to replenish its reserves before winter. It intends to fill 85% of its gas capacity by October. It has taken energy-saving measures to accomplish this.
Economy Minister Robert Habeck stated that such measures, along with purchasing gas from alternative suppliers, had enabled Germany to meet its target earlier than expected.
He predicted that the 8 per cent target could be met by the beginning of September. (Adapted from EuroNews.com)
Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized
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