European Council president says EU must act now on ‘catastrophic’ energy price hike European Commission
European Council President Charles Michel said the EU must “make up for lost time” in finding urgent answers to rising energy prices that are a “disaster” for households and businesses.
Michel, who chairs summits of EU leaders, said the bloc needed to address the issue of price setting, an idea supported by many EU member states.
In a rarely subtle criticism, he said the European Commission was too late to come up with proposals on the price crisis despite repeated calls from EU leaders for action.
“There is no day to lose,” Michel said, urging the EU executive to put “concrete proposals on the table” as soon as possible and not wait until September 14 when European Commission President Ursula von der Leyen is due to deliver her annual State of the Union address. .
On Monday, von der Leyen said the commission was preparing plans to separate electricity prices from the high cost of gas, in an effort to ensure that electricity prices reflected cheaper renewable energy. Her comments led to a sharp drop in wholesale gas prices.
EU energy ministers will hold emergency talks on September 9, but they are not expected to have formal proposals to discuss.
Michel, who has chaired several EU discussions on energy, made clear his dissatisfaction with the timing in an interview with European newspapers, including the Guardian.
“We have to address the issue of price caps,” he said. This is nothing new, we are not starting this discussion today. That is why we have called on the Committee several times in the past to put concrete proposals on the table to help Member States make a decision.
“The ideological debate about tools is not enough. We need concrete and actionable proposals on the table in order to make this happen.”
European Commission insiders suggested that the President of the European Council was not in the picture about recent developments and that his comments reflected the underlying tensions between the heads of the sometimes competing EU institutions.
Michel also said it was time to discuss separating gas from electricity prices. In the European Union, electricity prices are set based on the price of the most expensive fuel, usually gas. This arrangement has turned a profit for renewable energy companies that can generate electricity that is cheaper than wind and solar power.
A leaked paper proposes a price cap for “under the edge technologies” – renewables that cost less than gas – as part of a series of measures to counter all-record gas and electricity prices.
The windfall gains from this policy (the difference between the cap and the market price) will be used to support the poor households. The paper also calls for measures to reduce electricity demand.
The document, seen by The Guardian, carries a disclaimer that it is not a policy note for the European Commission, and has not been approved by senior officials responsible for EU energy policy.
The rise in energy prices resulted from a sharp decline in gas supplies from Russia: in June 2022 these were less than 30% of the average between 2016 and 2021.
Michel warned that EU institutions risk losing support without taking urgent action. “It’s really important not to forget that for our citizens, our families, our businesses and our small and medium businesses – for them, the increase in gas and electricity prices is a disaster.”
Fears of a harsh winter ahead have raised concerns about potential EU support for Ukraine waning, with the brutal war against the Russian invasion continuing while Kyiv goes bankrupt.
Michel said he was confident the European Union would soon approve €9 billion (£7.8 billion) in financial aid to Ukraine, well short of Kyiv’s estimated €5 billion monthly financing needs.
So far, the EU has released €1 billion of the €9 billion promised, after internal wrangling over how to share the cost among member states, and the right balance between grants and loans. “This is urgent for us,” Michel said, adding that he was confident “we will be able to deliver on what we promised.”