The EC has proposed a set of measures to counter the rise in energy prices

The European Commission (EC) has proposed a set of measures that EU countries can use to address the effects of rising global energy prices, the Commission said. Short-term national measures include support to households through energy vouchers, state aid to businesses and targeted tax cuts.

The Commission also announced its intention to support investment in renewable energy and energy efficiency, to explore possible ways to store energy and purchase gas reserves, and to assess the current structure of the electricity market.

"Rising world energy prices are a serious problem for the EU. As we recover from a pandemic and embark on an economic recovery, it is important to protect vulnerable consumers and support European businesses. This winter, the Commission is helping Member States to take immediate action to reduce the impact on households and companies, "said Energy Commissioner Kadri Simson, quoted in the press release.

"At the same time, we are identifying other medium-term measures to ensure that our energy system is more resilient and flexible to withstand any future fluctuations during the transition period," she added.

In the Commission's view, priority should be given to targeted measures that can quickly mitigate the effects of price increases on vulnerable consumers and small businesses.

"These measures should be applied until spring, when the situation is to stabilize. Our long-term transformation and investment in cleaner energy sources should not be disrupted," we also read.

Short-term measures to protect consumers and enterprises proposed by the European Commission:
- Provide emergency income support to energy poor consumers, for example through vouchers or partial bill payments that can be supported by EU ETS revenues;
- Authorization of temporary postponement of bill payments;
- Introduction of security measures to avoid disconnection from the network;
- Provide temporary, targeted tax cuts for vulnerable households;
- Providing aid to businesses or industries in line with EU state aid rules;
- Ensure transparency and flexibility of international markets;
- Investigate possible anti-competitive behavior in the energy market and ask the European Securities and Markets Authority (ESMA) to further improve monitoring of changes in the carbon market;
- Facilitate and support wider access to renewable energy purchasing contracts.

According to the Commission, "the clean energy transition is the best hedge against future price shocks and should be accelerated."

While cheaper renewables play an increasing role in supplying the electricity grid and setting prices, other energy sources, including gas, are still needed in times of increased demand, the Commission stressed.

She also drew attention to the importance of gas storage. She recalled that the EU currently has the capacity to store more than 20% of its annual gas consumption, but not all Member States have storage facilities and their use and maintenance obligations vary.

Medium-term measures proposed by the European Commission for a low-carbon and resilient energy system:
- Increase investment in renewable energy, renovation and energy efficiency, and accelerate renewable energy auctions and permitting processes;
- Developing energy storage capacity to support the expanding share of renewable energy sources, including batteries and hydrogen;
- Ask the European energy regulators (ACER) to investigate the advantages and disadvantages of the existing electricity market structure and to make recommendations to the Commission;
- Consider revising the security of supply rules to ensure better use and functioning of gas storage in Europe;
- Explore the potential benefits of voluntary joint procurement by Member States of gas stocks;
- Establishing new cross-border regional gas risk groups to analyze risks and advise Member States to develop their national preventive and emergency action plans;
- Increase the role of consumers in the energy market by enabling them to choose and change suppliers, generate their own electricity and join energy communities.

"The measures set out in the toolkit will help to respond rapidly to the current energy price spikes as a consequence of the world's exceptional situation. They will also contribute to an affordable, fair and sustainable energy transition for Europe and greater energy independence. Investments in renewable energy and energy efficiency. not only will they reduce dependence on imported fossil fuels, but also provide more affordable wholesale energy prices that are more resilient to global supply constraints, "the release reads.

The EU, like many other regions in the world, is currently experiencing soaring energy prices. This is primarily due to the increased global demand for energy, and in particular for gas, as the economic recovery following the peak of the COVID-19 pandemic is gaining momentum. In 2021, the European carbon price also increased sharply, but at a slower pace than gas prices. The impact of the increase in gas prices on the price of electricity is nine times greater than the impact of the increase in the price of carbon dioxide emissions.

The Commission's position and toolkit are to be presented today to Members of the European Parliament and Energy Ministers.