There has been a sharp increase in Energy prices since mid-2021. This is not only a consequence of the coronavirus pandemic and the economic boom of the past months, but also of the geopolitical tensions between the West and Russia over Ukraine. In October 2021, the EU Commission has already presented EU Member States with a toolbox of measures to help them tackle the immediate effects of the increase in Energy prices. In order to protect households and companies from the huge economic and social impact of this increase, EU Member States have so far made available more than 21 billion Euro for the most hard-hit.

On Wednesday, 2 February 2022, Commissioner Kadri Simson, who is in charge of energy, appeared before the European Parliament’s Committee on Industry, Research and Energy (ITRE). In her initial statement, she referred to the historically high levels of gas prices in the EU – even though prices have slightly decreased as of recent. In addition, energy prices are responsible for half of the inflation rate of 5 % in the Eurozone. Gas supplies through Belarus and Ukraine have fallen to half of their normal level. As a result, gas stocks in Europe have been reduced to approximately 40 %. According to Commissioner Simson, it has been possible to balance bottlenecks in part by increasing the import of liquefied natural gas.

The European Commission expects energy prices to remain high and volatile during for some time before they will stabilize at a higher level than pre-crisis. The continuous close monitoring of the situation is of vital importance, emphasised Simson. It remains essential to protect the most affected households, to put in place direct support measures, to provide stronger consumer protection also in the short-term, to advance green technologies and to accelerate approval procedures for renewable energy installations. Apart from that, Simson demanded better information regarding contracts containing price adjustment clauses, as in particular customers with dynamic price contracts are the most affected by the exploding energy prices. According to the Commissioner for Energy, the EU Commission will present relevant recommendations to Member States. Apart from that, she referred to the revised gas markets and hydrogen package that the Commission adopted in December 2021.   

The MEPs of the ITRE Committee called upon the Commission to not only inform but also to increase its monitoring in order to recognise manipulation with regard to pricing. In light of the massive increase in prices, one could no longer talk of a functioning energy market. Due to the rather vague statements made by the Commissioner for Energy, MEPs wanted to know, which concrete measures the European Commission was planning to take in order to solve the current energy price crisis. However, Simson did not provide the ITRE Committee with a detailed answer.

For to the AK Energy as a key element of public services must remain affordable. This applies in particular to poor households. Hence, immediate action must be accompanied by long-term solutions. From the AK’s point of view, an Energy and Climate Aid Fund is required, which sustainably combats energy poverty in the long-term. A lasting tax reduction on renewable electricity should also be considered to ensure that switching to electricity remains attractive in future.

Further information:

AK EUROPA: High energy prices: Commission presents Catalogue of measures

AK EUROPA: New concrete proposal for a climate-neutral Europe

AK EUROPA: Energy and Climate Aid Fund

AK EUROPA Position Paper: Energy Efficiency Directive

A&W Blog: When the energy bill becomes a threat