The EU has unveiled a toolkit to combat rising energy prices

The European Commission has proposed a package of policies to help EU member states maintain low fuel and energy prices.

On Wednesday, the European Union offered a slew of alternatives for members to address the issue of rising energy bills.

Brussels is attempting to mitigate the impact on consumers of an anticipated energy shortfall, which may result in skyrocketing domestic costs.

What are the tools, exactly?

There are several urgent steps that may be taken to safeguard vulnerable customers and businesses:

  • Provide immediate financial assistance to energy-short clients.
  • Authorize bill payment deferrals for a limited time.
  • Ensure that measures are in place to prevent electrical grid disconnections.
  • Reduce tax rates for disadvantaged households on a brief, targeted basis.
  • In accordance with EU state aid regulations, provide assistance to enterprises or industries.
  • Examine the possibility of anticompetitive conduct in the energy sector.

Along with decarbonization, there are also some additional medium-term options for improving market resilience:

  • Increase renewable energy and energy efficiency investments, and expedite permitting processes.
  • Increase the capacity of energy storage
  • Consider altering the bloc’s supply-chain restrictions.
  • Examine the possible benefits of member nations working together to procure gas.
  • To assess risks, create new cross-border regional gas risk groupings.
  • Allow users to select and switch providers, as well as create their own electricity.

Rising prices are a particular source of concern for EU Energy Commissioner Kadri Simson as the bloc works to recover from the coronavirus crisis.

“The Commission is assisting member states in taking immediate steps to mitigate the effect on homes and businesses during winter,” Simson added. “At the same time, we identify other medium-term steps to guarantee that our energy system is more resilient and adaptable during the transition to survive any future turbulence.”

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​​​​“The current scenario is extraordinary, and for the past 20 years, the internal energy market has served us well. However, we must ensure that this remains the case in the future.”

Why is the EU acting in this manner?

The goal is to provide member nations the power to keep energy prices low while adhering to stringent competition regulations.

Some member states have already taken national action to rein in rising costs.

France has pledged a price cap and was planned to provide €100 ($115) payments to disadvantaged people. Meanwhile, Italy was already discussing measures such as tax cuts to alleviate the situation.

Spain, France, and Greece have all advocated for more extensive European actions in the medium term. They want the bloc to coordinate gas purchases, build shared gas storage, and break the connection between power and gas prices.

The EU meeting on October 21 and 22 will see concrete discussions.

What is behind the rise in energy prices?

As national economies look to be recovering from the impacts of the COVID epidemic, fuel and energy costs have risen.