A European Union-wide cap on electricity prices and major reform of the EU’s electricity market is urgently required to address soaring bills according to Fine Gael’s Colm Markey.
The Midlands-North-West MEP said the current system is not fit for purpose as currently, wholesale electricity prices are linked to the price of gas.
That’s despite only 21% of EU electricity being produced from gas, with the vast majority coming from renewables who’s cost base has not changed significantly as a result of the crisis.
He commented, “Only a fifth of the electricity generated in the EU comes from gas while two thirds comes from renewables yet we’re in a situation where electricity prices continue to be directly linked to the price of gas. We should have a price based on the cost base of the 80% of the market that hasn’t been affected rather than the most expensive 20%.
“At a time when homeowners and businesses face astronomical bills, emergency intervention is needed. The EU must look at price caps and changing the system to decouple electricity and gas prices altogether.
“This should be top of the agenda at an emergency meeting of EU energy ministers next week. Changes to the EU’s electricity market have been resisted by some member states in the past but we are in unprecedented times and solutions need to be found as a matter of urgency. We also have a fundamentally changed supply profile where gas plays a smaller part and that should be reflected in the overall framework
“We’ve seen record profits being made by energy companies as prices for ordinary consumers rise. ‘War-profiteering’ needs to be called out. The best way to put cash in people’s pockets is through price cuts, not windfall taxes for Governments.”