A new toolbox has been introduced by the EU Commission to help the bloc address the current instability within the energy market and increases in energy prices.
The toolbox is part of the Communication on Energy Prices adopted by the Commission and comprises short-term and medium-term mechanisms that can be implemented to reduce the impacts of energy price increases.
The toolbox presents ways the bloc can avoid the current energy woes from happening again in the future.
Energy Commissioner Kadri Simson said: “As we emerge from the pandemic and begin our economic recovery, it is important to protect vulnerable consumers and support European companies.”
Short-term mechanisms recommended by the Commission include the provision of emergency income support to consumers living in energy poverty and state aid to utilities, reducing tax, and encouraging the adoption of renewable power purchase agreements, amongst others.
The EU Commission has also proposed joint natural gas buying amongst its member states to avoid further increases in prices and to ensure that all of its member states have an adequate supply of energy.
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The launch comes after Europe’s energy prices increased by more than five times compared to the same period last year. Reasons for the increase include a decrease in supply from Russia, which provides 40% of the bloc’s total gas, an increase in demand owing to re-opening of economies, and the failure by EU countries to fill up their gas storage after a long winter last year.
However, Russian president, Vladimir Putin, denied allegations that his country is using energy as a political weapon. During the Russian Energy Week conference, he said the current energy crisis in Europe must not be blamed on Russia and that his country has met all of its contractual obligations with EU countries. Putin said Russia is ready to increase its supply to the EU if needed.
Simson added: “The current situation is exceptional, and the internal energy market has served us well for the past 20 years. But we need to be sure that it continues to do so in the future, delivering on the European Green Deal, boosting our energy independence and meeting our climate goals.“
Medium-term measures include increasing investments in renewable energy and energy efficiency, boosting the role of consumers in the energy market, and revising regulations around natural gas supply chains.
Commenting on the launch of the International Energy Agency (IEA)’s 2021 World Energy Outlook, Dr Fatih Birol, IEA’s executive director, said reducing reliance on fossil fuels by scaling up investments in green energy can help the EU alleviate its energy woes.
The EU Commission is also proposing the expansion of gas storage systems as a medium-term measure to stabilise its energy market. Today, the EU has storage capacity for more than 20% of its annual gas use, however, not all member states have storage facilities.
The UK government has even approved the deployment of a gas energy storage project in Northern Ireland to expand its capacity with seven new caverns. Islandmagee Energy will deploy the project which will store around 500 million cubic meters of natural gas, hold up to 25% of the UK’s storage capacity and provide Northern Ireland with enough energy for 14 days during peak demand.
The toolbox will be presented to EU energy ministers on 26 October.