Energy crisis: how should the EU react?
The EU wants to reform the electricity market. The skyrocketing electricity prices, dictated primarily by by gas-fired power plants, are now "exposing, for different reasons, the limitations of our current electricity market design", EU Commission President Ursula von der Leyen said on Monday. Representatives of the EU member states will meet on September 9 to discuss alternatives. Europe's press debates the necessary measures.
Inaction since 2014
La Stampa criticises the EU for wasting valuable time and now being caught off guard:
“The energy storm triggered by Moscow was foreseeable and had been predicted. The EU Commission warned capitals as early as autumn 2014, the year of the first major crisis in Ukraine, that the EU could only control some of the factors on which the stability of Russian gas supplies depended, so it would be wise to take corrective measures and resolutely ensure energy security on the continent. ... But nothing happened. ... So we now face the worst energy crisis in living memory and don't know how to respond to the fears of what this winter holds.”
The state must take back control
The free market has failed in this regard, Le Soir laments:
“The 27 member states must get their act together and remember that the market, and the suppliers/speculators who are leading them by the nose are only powerful if the states give them a free hand. 'The energy market is in a deadlock,' Belgian Energy Minister Tinne Van der Straeten has declared. 'Fix it', one might be tempted to tell the European institutions. The state should take back control. This is what EU Commission President Ursula von der Leyen promised on Monday when she announced emergency measures and a structural reform of the electricity market for 9 September. Better late than never?”
Cushion the energy shock
La Vanguardia calls for immediate, effective action:
“Decisions must be taken at the European level. The Belgian prime minister has called urgently for an EU cap on gas prices. ... In the UK, an increase in subsidies for low and middle income earners is already under discussion, as is a loan programme for energy companies. ... France has also taken measures such as capping electricity price hikes at four percent and freezing natural gas prices. ... The rise in electricity and gas prices in Spain requires a more far-reaching debate than has been conducted so far in order to be able to react to the energy shock in the best way possible.”
Build as many green power plants as possible
The UK is paying a high price for its failure to invest in additional energy sources such as wind, hydro and nuclear power, columnist Hugo Rifkind laments in The Times:
“All those billions we're about to spend on caps and tax cuts and rebates, and with every pound we'll be renting our future rather than investing in it, getting nowhere beyond through the dark, cold night to tomorrow. There is a proverb, of which I was recently reminded, that the best time to plant a tree is ten years ago, and the second best time is now. ... Build it. Build it all [sustainable power stations]. And if it makes the nation's finances hilariously bad rather than merely ridiculously bad, so be it. We will never regret it. If only we'd built it all already.”
Exploiting our own gas reserves is the solution
Instead of disrupting the liberal market, the range of energy sources should be expanded through fracking, Berlingske demands:
“The tendering of permits for the exploration and extraction of natural gas in the North Sea should be resumed. The aversion to fracking as a method of extracting natural gas should be reconsidered. Fracking has made the US independent of fossil fuel imports and helped reduce US CO2 emissions by replacing coal with natural gas. ... Let the price mechanism do its job in peace and start Danish natural gas production. It could contribute to phasing out coal in Europe and globally.”
Technical advances will disarm Russia
Novaya Gazeta Europa explains what Moscow fears most:
“The danger for the Russian state lies less in the diversification of European energy imports than in technical progress as such: efficient engines, energy-saving buildings, high-tech lighting systems. The development of such things will eventually knock the 'gas weapon' out of our leadership's hand: Europe will no longer depend on us and will no longer have to make concessions to us. ... If Putin could, he would probably shut down all wind power plants, have all solar panels destroyed and block all research in this area. Our state defends the archaic and the outdated.”
Energy exports hard to justify domestically
Norway is in a bind, Svenska Dagbladet explains:
“In a commentary that has received much attention in Norway, the Financial Times argued that it is time to ask the country to sell gas to the EU below market price. Prime Minister Jonas Gahr Støre is under pressure when it comes to energy exports. ... Norway has already announced some measures that have been a cause of much concern. Within the other governing party, the Centre Party, there are strong demands for energy nationalism. The populist Progress Party under new leader Sylvi Listhaug, meanwhile, is taking the same line and calling the prime minister irresponsible.”
Protectionism very short-sighted
Helsingin Sanomat finds the news that Norway wants to export less electricity due to low water levels in its reservoirs worrying:
“Norwegian electricity flows not only to the Nordic countries but also to Central Europe and the UK. ... Export restrictions and protectionism are simple answers to complex problems. ... In the coming winter, Europe needs cross-border solidarity. A winter of protectionism could damage the efforts to build a functioning electricity market in the long term. That would be a great pity, because the basic arguments for a large and smoothly functioning electricity market will still apply when spring comes.”
Europe needs a joint strategy
Economist Lucrezia Reichlin stresses the importance of joint EU action in Corriere della Sera:
“Energy nationalism doesn't work in a global market. A joint approach makes sense both in terms of more efficient crisis management - rationing, procurement, price caps, financing emergency measures - and for industrial and political reasons. The industrial aspect is based on the energy industry's economies of scale. The political one on the fact that our dependence on the rest of the world will not end even if we achieve the end of our dependence on Russia.”
Don't make others do the dirty work
Deutschlandfunk calls for an honest debate about domestic gas:
“It will also involve hydraulic fracking. ... The technology is associated with [environmental] risks. It was banned in Germany in 2017. ... We don't want to frack in our own country, but we do want to have fracking gas delivered to us via LNG terminals in Wilhelmshaven, Stade or Brunsbüttel. And let's be honest: the environmental conditions under which Russian natural gas is extracted didn't interest us anyway. We want to phase out everything that has a reputation for being dirty, we want to feel good.”
The better-off should pay more
In smaller countries the focus must be on protecting low-income households from the effects of the crisis, explains the Times of Malta:
“The energy crisis is not going away anytime soon. Some countries like France, Germany and Japan can increase their reliance on nuclear power stations to mitigate the problem of energy inflation. In Malta, we have no such option. ... Protecting vulnerable households should be the government's top priority. The better-off in society should carry a more significant share of the burden imposed by energy inflation, by paying higher rates for consumption over prudent benchmarks.”