The European Commission will introduce an emergency tool to curb electricity prices next week, The Daily Telegraph reported.
The head of the European Commission, Ursula von der Leyen, said that Brussels is preparing emergency measures to intervene in the electricity market, and is also working on a structural reform of the energy market against the backdrop of a worsening energy crisis.
Von der Leyen said this would allow the bloc to contain electricity prices by breaking the link between gas and electricity prices.
“We must develop a tool that will allow us to ensure that the price of gas no longer dominates the price of electricity. We see that now, given these exorbitantly high gas prices, it is necessary to untie (them),” von der Leyen said during a German Ministry of Economics speech.
Earlier at the Strategic Forum in Slovenia, the head of the European Commission said that the soaring electricity prices “reveal the limitations of the current design of the EU electricity market,” as this design “was developed under completely different circumstances and for completely different purposes.”
Electricity prices are now rising along with gas prices as more than 35% of the UK, and the EU electricity comes from gas-fired power plants.
In this market structure, the total wholesale price of electricity is determined by the cost of electricity generated by gas-fired power plants.
Thus, all electricity increases in price, even if it is generated more cheaply.
Presumably, two separate markets will be created – for electricity produced by wind and solar and gas and coal.