Dan Jorgensen
“We are not facing a supply crisis, but we are in a price crisis and we cannot ignore it.” Brussels prepares “targeted and short-term measures”.
The European Commission considered this Monday that the European Union (EU) faces a “price crisis” in energy due to the conflict in the Middle East, admitting “targeted and short-term” measures without changing the European energy system.
“I’m going to speak to the Energy Ministers today [da UE] to hear the analysis of the situation and understand how serious it is. For me it is important to highlight that We are not facing a supply crisisbecause this, naturally, would imply the need for other measures, but right now we are in a price crisis and the fact that prices are so high is something we cannot ignore,” said European Energy Commissioner Dan Jørgensen.
Speaking to journalists before the Energy Council in Brussels, the official assured that the institution is “analyzing different types of measures”.
“I can’t go into too many details at the moment, but there is one important point I want to highlight: we are not talking about structural changes in the European energy system”, he highlighted.
According to the European responsible for supervision, what is at stake are “targeted and short-term measures”.
“What puts us in a better position to deal with the situation now, compared to 2022, is that we have managed to integrate much more renewable energy into our systems,” he pointed out.
As for the possibility of changing the operating model of the electricity market, “we are clearly interested in keeping it as it is [porque] we need the market to function and guarantee security of supply, something that the marginal price system ensures, and we also need prices as low as possible, something that is guaranteed by market forces”, said Dan Jørgensen.
The European Commissioner said that, compared to 2022, when the sharp energy crisis hit, today “there is to a much greater extent a decoupling between the prices of gas and electricity because there are fewer times when it is the price of gas that ends up determining the price of electricity”.
The statements come at a time when energy prices (gas and electricity) are rising in the community.
Among the options under discussion in the EU are the possibility of temporarily limiting the price of gas, reducing taxes and charges on energy bills and allowing state support for companies and industrial sectors most affected by high energy costs.
Brussels also evaluates possible adjustments in the European carbon market and the use of strategic energy reserves to help stabilize prices.
At the same time, the European Commission defends consumer protection measures and insists that the structural response involves accelerate investment in renewable energy, electrical networks and energy efficiencymaintaining the current model of the European electricity market.
The President of the European Commission, Ursula von der Leyen, has already admitted the imposition of ceilings on the price of gaspointing out that rising energy prices are already costing taxpayers three billion euros, but refused to increase imports from Russia. Restrictions can have a “significant impact on the European economy”he said, also ruling out supply problems.
The International Energy Agency (IEA) is willing to release more strategic oil reserves “if necessary”, after unlocking 400 million last week, executive director Fatih Birol said this Monday.
Several possibilities, says minister
“Final decisions will be taken at the European Councilon Thursday and Friday, this was a preparatory meeting”, said the Minister of the Environment, Maria da Graça Carvalho, to journalists, on the sidelines of the Council of ministers responsible for the 27 Member States.
There are systems to help people and companies, particularly in terms of social electricity and gas tariffs, he said. Maria da Graça Carvalho highlighted that this meeting will produce a list of several possibilities “which will be discussed on Thursday and Friday”, at the summit”.
Among the possible immediate aids, the minister exemplified with “the solidarity bill program”which has already paid, in 2024, ten euros per gas cylinder and 15 euros in 2025. “It’s very easy, it’s my ordinance, which can turn into 20 [euros]for example,” he explained.
Any other mechanism, such as interfering with the market price, must be compensated by the State budget.
With regard to the fuel pricesGraça Carvalho reiterated that, on diesel and gasoline, a discount is made relative to the increase in VAT that would revert to the State.
“In the case of electricity and gas, especially gas, which is very important for the industry, the Government will take ready measures to help”, he said.
All this happens less than three weeks after the United States and Israel launched an attack, killing Ayatollah Ali Khamenei, the country’s supreme leader since 1989, during the offensive. closed the important Strait of Hormuz and launched retaliatory strikes against targets in Israel, US bases and other infrastructure in countries in the region.
Any military escalation that affects energy production or transport — especially in the Strait of Hormuz, through which about a fifth of the world’s oil passes — tends to generate shocks in international energy markets and raise prices.
There are fears in Europe that the energy crisis situation will return to 2022, after the Russian invasion of Ukraine, as the community space depends heavily on imports from global markets, many of which are directly or indirectly linked to the Middle East.
