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EU to discuss gas supply crisis and electricity prices

European energy ministers are holding a special meeting in Luxembourg to try to forge agreement on how to emerge from the current crisis in gas supplies, and the knock-on effect to electricity prices.

Ireland has joined eight other mostly northern European countries in rejecting calls for a wholesale reform of the single energy market, or the creation of a strategic European gas reserve.

High energy prices are hitting consumers and businesses across the continent.

There are many reasons for this. There has been a surge in demand as economies have pulled out of the pandemic, China has been buying huge reserves of gas, and storage facilities were not topped up last summer as they normally would have been.

All that means a shortage of supply and a spike in prices.

Because of the way the energy market works, the supply of gas generally sets the market price of electricity, and as such electricity prices have surged as well.

The supply of gas is also entangled with geopolitics.

Russia could have increased supply but has chosen not to in order to put pressure on Berlin to approve a new gas pipeline between Russia and Germany.

Some countries, such as Spain which has been very badly hit, have called for Europe to create a strategic gas reserve in the same way as Covid vaccines were purchased.

Ireland believes that could be a problem in that it would require a big expansion of storage, and would probably mean wholesale legal changes.

The Government would prefer that Europe accelerate renewables and speed up energy efficiency and that the European Commission press ahead with a report on the functioning of the European energy market.

Article Source – EU to discuss gas supply crisis and electricity prices – RTE – Tony Connelly

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