Price of electricity reaches record highs
Electricity prices have soared in EU countries since the beginning of the year. The electric baseload - the minimum amount of electricity required by the power grid - currently costs more than twice as much on the electricity exchange platforms as it did in the summer of 2020, while natural gas prices have increased ten-fold in the same period. Increased demand in Asia and less input from wind power are among the reasons for the surge in prices.
E-cars will exacerbate the problem
The high electricity prices will set a whole chain reaction in motion, Postimees fears:
“The price of electricity will probably rise even further in the winter. Not only will heating cost more, but the prices of other goods will also increase. If the government fails to react adequately, the right-wing populist parties will benefit. The other problem is supply. We must reckon with the fact that in the long run electric and hydrogen-powered vehicles such as those envisaged in the context of the 'Fit for 55' package will only increase demand for electricity. This means that we'll have to start thinking seriously about other alternatives besides solar and wind energy.”
It's the oligopoly that is distorting prices
In Spain, the government has decreed that energy companies must hand over some of the profits they earn from now until next March. Eldiario.es refutes arguments put forward by electricity companies and the conservative opposition that this constitutes an intervention in the free market economy:
“What they call the 'markets' is, in the case of the energy companies, an oligopoly that contravenes the basic laws of the free market. The big companies in the sector - Endesa, Iberdrola and Naturgy - have stakes in the different phases of generation, conversion and marketing. They are also the main beneficiaries of a peculiar procedure for fixing prices, which generally results in each kilowatt-hour being charged at the rate of the most expensive type of energy generation (thermal, nuclear), meaning that the lower prices for renewable energy rarely have an impact on what the consumer pays.”
Green energies not enough to save the climate
The problems with green power production make it clear that the EU needs to rethink its climate strategy, Die Presse writes:
“From today's perspective it's not possible to operate a power grid with fluctuating solar and wind energy inputs. ... And that's how things will be for a long time to come. ... So in addition to realistic emission reduction measures which in any event won't be enough to achieve the required 'negative emissions', it's time to focus on taking CO2 directly out of the atmosphere. That can be achieved through technical facilities (which are still in the early stages) and 'bio-geoengineering', for example the large-scale reforestation of areas that are currently too dry or too cold. All of this, however, requires major interventions in nature. Now the technicians need to get to work.”
Energy risk for the EU
The EU's dependence on energy-producing countries will become increasingly problematic as demand grows, La Repubblica warns:
“The global economic recovery is progressing despite the Delta variant - also thanks to vaccinations - and energy consumption is rising. The utopia of a rapid transition to an 'emission-free' planet is on a collision course with the limits of renewable energies and a delay in technological progress. Regions that consume more energy than they produce - like Europe and China - are the weak side of the new 'energy risk' that binds economics, finance and important geopolitical strategies together. America and Russia are on the winning side.”
Pretty words won't generate green electricity
The rising prices are also making themselves felt in Estonia but consumers can do little about it because the state has hardly expanded renewable energy in recent years, says Õhtuleht:
“The pollution tax has made oil shale energy expensive. There is hardly any cheap green energy on the market right now - no wind, no solar. For years there have been discussions about building nuclear power plants, wind farms in the ocean, and what solar panels should look like. There's always some reason why something can't be done. ... Energy is a sector with a lot of nice words like sustainability and climate neutrality. The plans are long-term and CO2 neutrality by 2045 is a long way off. Until then, the experts are predicting high electricity prices.”
Time ticking away for offshore gas production
Economist Andreea Mitiriță of the accounting firm PwC stresses in Ziarul Financiar that Romania needs to expand its gas production in the Black Sea as quickly as possible:
“The Green Deal targets make it difficult to use natural gas as a transitional solution, in other words to replace coal with gas in the short or medium term. Otherwise, this opportunity may be lost. According to our estimates, Romania could be 53 percent dependent on gas imports by 2030 (compared to 20 percent in 2020) if onshore production decreases naturally and no investments are made in offshore production. ... Romania is the second largest producer of natural gas in the EU after the Netherlands. If the Groningen gas field is closed in 2022, Romania has the potential to become the largest gas producer.”