The power crisis in Europe, stemming from both major climate change issues and Russian gas holding the continent hostage as part of Moscow's invasion of Ukraine, has now reached levels forcing the EU to take drastic action.
The European Union is planning urgent steps to push down soaring power prices, Commission President Ursula von der Leyen said on Monday.
“The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” von der Leyen said in a speech at the Bled Strategic Summit in Slovenia. “It was developed under completely different circumstances and completely different purposes.”
She added, “That’s why we are now working on an emergency intervention and a structural reform of the electricity market.”
The unprecedented spike in power prices, which have soared almost 10-fold in the past year, has fueled inflation and increased the economic burden on businesses and households recovering from the pandemic. More and more member states are calling for a price cap and the Czech Republic, which holds the rotating presidency of the EU, plans to convene an extraordinary meeting of energy ministers on Sept. 9.
The exact details of an EU intervention plan are still being developed, and EU diplomats said the EU’s executive arm could offer a detailed plan as soon as this week.
With Russia squeezing gas deliveries and power-plant outages further sapping supply, the pressure is growing on EU leaders to act quickly or risk social unrest and political upheaval. Czech Prime Minister Petr Fiala is seeking backing for his price-cap plan and plans to discuss possible limits with German Chancellor Olaf Scholz.
“High energy prices are a Europe-wide problem that we need to tackle at European level,” Fiala said on his Twitter account. “Ahead of the EU Energy Council we want to find a way to help people and businesses that we can agree on with other European leaders.”
Czech officials are proposing to cap prices of natural gas used for power generation, Industry and Trade Minister Jozef Sikela said on Monday.
“We may open the question of emission allowances, as some other member states have done in past, that also present a major part of the total price,” Sikela said. “We may open the question of the overall market regulation, total decoupling of the prices,” adding that the bloc cannot meddle too much with the market or fuel speculation.
Russia has successfully leveraged its natural gas resources as both an economic and political weapon against the EU in the continuing Russian war in Ukraine. It's safe to say at this point that while Russian sanctions are hurting Moscow, Russia cutting off the EU from natural gas has also crippled the continent.
All indications are that, while Ukrainian forces with EU/US help have stalled Russia in the Donbas militarily, if even the stodgy EU is talking about emergency measures to prevent widespread riots and worse because of massive power bills and electricity shortages, Russia is absolutely winning this political part of the war.
On top of all this, Russian forces continue to hold the Zaporizhzhia nuclear power plant, with growing fears of meltdown in Europe's largest nuclear facility.
The pressure on the EU to surrender Ukraine to Moscow will only increase in the weeks ahead. Imagine what adding an extra zero to your monthly power bill would do here in the US, and you have an idea of what's going on in Europe right now.
It's not good, folks. Putin is risking nuclear disaster and millions of deaths from cold, starvation, or worse in the months ahead in order to force the EU to give up. And if the EU does give up, Putin will do all this again to take his next target, and his net, and his next...
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