The European Commission’s toolbox against the energy price surge

A set of short-term and medium-term policy measures have been presented by the European Commission that would allow the national governments to protect the consumers from the soaring electricity and natural gas prices.

The immediate measures include income support for vulnerable citizens through vouchers, partial bill payments or temporary deferral of bill payments, safeguards to ensure that households will stay connected to the electricity network and temporary reductions in taxation rates on the benefit of vulnerable consumers. When it comes to commercial customers, the provision of aid to companies was suggested, according to the EU state aid rules. Moreover, it was mentioned that the EC will be taking under consideration, after proposals of EU members, a joint gas purchasing mechanism among all EU countries to better control and mitigate price spikes.

Any unfair market practices and developments in the carbon market should be closely investigated and monitored through the European Securities and Markets Authority (ESMA). At the same time, the governments are urged to work towards the enhancement of international energy outreach and the wider access to renewable power purchase agreements.

The Commission’s recommendations aim to facilitate the clean energy transition, replace fossil fuels with renewables and prevent similar price volatility in the future. The toolbox contains more medium-term measures, such as the acceleration of investments in renewable energy sources, the development of energy storage capacity and the exploration of possible benefits by joint procurement programs for gas reserves between member states.

Author: Anastasia Papageorgiou, Journalist

Sources:

[1] European Commission: “Energy prices: Commission presents a toolbox of measures to tackle exceptional situation and its impacts”, 13.10.21

[2] Reuters: “Gas reserves, subsidies and tax cuts: EU's tools to combat energy price spike”, 13.10.21