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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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The EU Is Panicking Over Skyrocketing Energy Prices

  • The benchmark European gas prices continued their rally this week, surging to new record highs on Wednesday

  • Five European countries, which include Spain and France, issued a joint statement on Wednesday on the troublesome high energy prices
  • The statement calls for a probe into the gas market and for a reform of the wholesale electricity market

As Europe’s benchmark gas prices hit records highs every day amid tight supply, the European Union (EU) is looking at a single-market response to the surging energy prices as it scrambles to keep its green targets amid soaring power bills.

The benchmark European gas prices continued their rally this week, surging to new record highs on Tuesday to an equivalent of $205 a barrel oil, amid a wider energy commodity rally driven by supply concerns ahead of the winter. The gas price at the Dutch TTF hub, the benchmark gas price for Europe, even topped 160 euro per MWh on Wednesday, before falling back toward 100 euro per MWh.

Some countries, such as Spain, called on the European Commission last month to provide the 27 member states with options to tackle the surging energy prices which are already hitting consumers across the bloc.

As energy prices continued to set records day after day in October, European Energy Commissioner, Kadri Simson, told the European Parliament on Wednesday:

“The Commission will present next week a toolbox of measures Members States can take in line with EU law, both short and medium term.”

“In the Commission view, Europe must respond by delivering swift coordinated action at Member States level, by leveraging the strength of its single market and by increasing its preparedness for future crisis,” Simson said during the European Parliament plenary session on energy prices.

The current energy crisis is not the result of the EU’s climate policies, which aim at a net-zero bloc by 2050, the commissioner noted.

“The current price hike has little to do with our climate policies and much to do with our dependence on imported fossil fuels and their volatile prices,” Simson said.

“The Green Deal provides the only lasting solution to Europe’s energy challenge: more renewables and improved energy efficiency,” she noted.  

Five European countries, which include Spain and France, issued a joint statement on Wednesday on the troublesome high energy prices. Among other things, the statement calls for a probe into the gas market and for a reform of the wholesale electricity market. Other mentions are calls to achieve energy independence.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on October 06 2021 said:
    The European Union (EU) is now paying a very heavy price for its rash policies to accelerate energy transition at the expense of fossil fuels and the incessant pressure by environmental activists and divestment campaigners on the European oil and gas companies to divest of their oil and gas assets. These two policies have been the major underlying reasons behind Europe’ energy crisis. They have been adversely affecting production of oil and gas as well as investments without affecting the global demand for them, thus creating an oil supply deficit and skyrocketing oil prices.

    Another reason is that the EU countries might have misjudged the market and delayed replenishing their low natural gas reserves before the onset of winter. Even Spain, a staunch member of the EU, warned the EU Secretariat that its energy transition plans may not survive the test of sky-high electricity prices.

    Two weeks ago, Fatih Birol, the Head of the International Energy Agency (IEA), claimed that the energy squeeze in Europe has nothing to do with renewables. He went on to say EU governments needed to keep their eyes on reducing global warming, even when times are volatile, referring to the sky-high gas prices in Europe. His statements were echoed today by the European Energy Commissioner saying that the current energy crisis is not the result of the EU’s climate policies. Both are not only absolutely wrong but they are deluding themselves. Europe’s energy crisis is showing them that ditching fossil fuels is a fantasy.

    With natural gas storage levels at a 10-year low just ahead of the winter heating season, the EU countries are facing hard choices from their limited range of options.

    If the EU wants more Russian gas supplies, then the onus is on it to facilitate the issuing of an immediate operational licence for the newly completed Nord Stream 2 gas pipeline to enable it to bring 55 billion cubic metres (bcm) of additional gas supplies under the Baltic Sea to Germany and the EU.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Kurt Springmann on October 06 2021 said:
    It is very interesting that the EU commissioner sees no relationship between their dire energy situation and their headlong plunge into Green energy without considering reliability, whiles another article on your site https://oilprice.com/Energy/Coal/Coal-Makes-Comeback-In-Europe-As-Gas-Prices-Explode.html when it clearly that exact problem: "the first weeks of September when every single day saw wind generation only a fraction of its usual strength and speed."

    Unreliable wind and solar have the entire EU but most notably Germany and Britain
    in trouble.

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