EThe European Commission has a long-awaited proposal to tame astronomical energy prices in Europe. And she supported the ceiling on electricity in all EU countries. Politicians from many countries, including the Czech Republic, have started calling for this step in recent weeks.
Unlike most of the scenarios considered so far, however, the commission, according to the proposal available to HN and first pointed out by the server Politico recommends going the route of setting a maximum price for electricity from cheaper plants, rather than the most expensive gas-fired ones, which drive up the final price. Specifically, it concerns nuclear, lignite or wind, hydro and other power plants based on renewable resources.
According to the working document, Brussels argues that the power plants in question have lower production costs than gas-fired plants and have the highest profits at current prices. Therefore, according to the EC, these earnings should be taken from nuclear power and other cheaper sources. The amount above the regulated price of electricity is then to be distributed as a subsidy for vulnerable households and companies in the member states.
Due to dramatically rising energy prices, which are already threatening key businesses on the continent, the Czechs have called an extraordinary meeting of energy ministers in Brussels for next Friday, at which they want to reach an agreement on a pan-European solution. The commission’s proposal opens this debate.
As presidents of the EU, the Czechs will now find out if and possibly what other solution can gain the support of the majority of states. Based on this, the commission should present specific measures on September 14.
So far, the Czech government has particularly liked the so-called Spanish way, i.e. capping the price of gas to power plants, as introduced in July by Spain and Portugal. “The Spanish scenario is definitely something that can work for others. We will want to discuss it at the Energy Council,” confirmed HN and Aktually a high-ranking representative of the Czech state administration.
Spain and Portugal set the price of gas for electricity production at 40 euros per megawatt hour (MWh). The state pays producers a subsidy for it, which covers the rest up to the market price. The costs of this should be compensated by a special tax paid by companies and households.
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According to the first conclusions, the system is paying off for people. In August, for example, the Spanish paid 282 euros per MWh even after taking into account the compensation fee, which was more than a third less than in most EU countries, as HN described. Electricity on the spot (short-term) market in Germany cost €520 per MWh this Thursday, after breaking through the €1,000 ceiling earlier in the week.
The advantage of the Spanish route is that it can be implemented relatively easily without destroying the market. The disadvantage of the southern European scenario is that someone has to pay for the subsidized electricity.
According to the European Commission, which approved the regime for Spain and Portugal as extraordinary state aid for a year, the costs in both countries will reach 8.4 billion euros. If the same system were to be extended to the entire 27th, European officials estimate that the costs would reach up to 100 billion euros in the first eight, nine months at current prices.
According to the newspaper El País, the Spanish government wants to officially present its system to ministers next Friday and propose that other countries adopt it. At the same time, Madrid wants to strive for a ceiling on the value of emission allowances, which affect the final price of electricity and currently range between 80 and 100 euros per tonne of CO2 released into the atmosphere. This requirement is also supported by several countries, including the Czech Republic, but most states are against interfering with the allowance market.
According to the leaked document, the commission also does not want to interfere with allowances. He wants to supplement the capping of electricity prices for cheaper power plants with energy savings wherever possible. By combining both, according to Brussels, balance will return to the energy market.