On the European electricity market, the most expensive power plant determines the price, and because it is currently powered by gas, prices are rising rapidly. That should change in the future. EU Commission President von der Leyen announces reforms, German resistance also seems broken.
In view of the ever-rising energy prices, EU Commission President Ursula von der Leyen has announced a reform of the European electricity market. The Commission is working on “immediate action and a structural reform of the electricity market,” said von der Leyen in the Slovenian city of Bled at an international conference. The skyrocketing electricity prices are now showing the limits of the “current electricity market design” that was developed for “different circumstances”.
Federal Chancellor Olaf Scholz also spoke out in favor of “structural changes” to lower energy prices. He was open to an energy price brake at European level. The current electricity prices “cannot be justified,” emphasized the chancellor when asked whether he was in favor of price caps.
According to media reports, Federal Economics Minister Robert Habeck also wants to fundamentally reform the electricity market. In the ZDF “heute journal” Habeck said on Sunday evening that in view of the rising prices on the electricity market “a solution” was being worked on. However, the underlying principle cannot be changed “simply with a snap of the fingers”.
The so-called merit order principle applies to the European electricity market. This means that the electricity price is determined by the most expensive power plant, which is currently gas-fired power plants. Southern EU countries such as Spain and Greece have been demanding market intervention for months. So far, however, they have failed, among other things, due to resistance from Germany.
Austrian Chancellor Karl Nehammer is calling for electricity prices to be decoupled from gas prices in the EU. The price of electricity must “get closer to the actual costs of generation,” said Nehammer on Sunday. At an emergency meeting of EU energy ministers next week, announced by the Czech EU Council Presidency, the topic of decoupling will also be on the agenda, Nehammer announced.
