Uche Cecil Izuora
European Union (EU) countries are discussing a call for the European Commission to “urgently” present concrete proposals to lower electricity prices in the short term, as well as using the review of the bloc’s emissions trading system (ETS) to reduce carbon price volatility.
Draft conclusions prepared for a meeting of EU leaders in Brussels on 19-20 March, seen by Argus, call on the commission to examine “all components” of wholesale and retail electricity prices. The draft conclusions — which may still change before the summit — also specify that the ETS review scheduled for July should “both reduce the volatility of the carbon price and mitigate its impact on electricity prices”, while preserving the ETS’ “essential” role in the climate and energy transition through its market-based carbon price signal.
Any changes to the ETS or the bloc’s market design would have to be proposed by the commission and then approved by majorities among member states and in the European Parliament.
Commission president Ursula von der Leyen said while addressing parliament on 11 March that the bloc should cut the impact of natural gas costs on power prices, listing “subsidising or capping” gas prices among the options.
Von der Leyen also noted that carbon costs average around 11pc of energy bills, alongside energy itself at 56 per cent, grid charges at 18 per cent and taxes and levies at 15 per cent. Europe would be consuming 100bn m³ more gas without the ETS, she added.