Robert Habeck is now used to acting as a petitioner on energy issues at European level. Now he’s doing it again, praising “solidarity in Europe” on saving gas before attending the emergency summit of EU energy ministers. Immediate measures against the high electricity prices were discussed there.
Consumers throughout Europe and many other countries around the world are suffering from the high prices, but Germany is particularly dependent on the solidarity of other EU countries this winter: Germany is one of the hardest hit by the supply freeze for Russian gas, and the high gas and electricity prices threaten industry to stall the country’s growth engine. The first companies are already bankrupt and more are likely to follow.
However, Habeck can rely on a supporter who was not in the room, but who had a decisive influence on the talks: Ursula von der Leyen, President of the European Commission. It is currently driving EU member states ahead not only on sanctions against Russia, but also when it comes to preparing the EU for next winter.
When it comes to electricity prices, Habeck should be grateful for that. Economists and politicians everywhere emphasize that one of the most important measures to reduce the price of electricity and gas consumption in winter must be to use less electricity. From the point of view of the EU Commission, it is even the most important measure.
“There is a global shortage of energy. That’s why: no matter what we do, we have to save electricity,” von der Leyen said two days before the summit.
Simone Tagliapietra, energy expert at Brussels think tank Bruegel, agrees. “It is very good that the Commission’s first priority is to reduce demand for electricity and gas,” he says. “That is exactly what Europe needs. And it’s easier to get consumers to save electricity than to save gas.” Germany in particular is dependent on the other EU countries also saving electricity.
However, the energy ministers did not agree on the issue. A gap opened up in the room that Habeck should not have liked: The fact that savings are necessary is not questioned. However, criticism was sparked by the Commission’s plans to make corresponding savings targets binding.
The dissent was palpable at the press conference after the meeting. Energy Commissioner Kadri Simson, who attended the meeting, said the Commission would like to set mandatory savings targets. On the other hand, the Czech Minister for Economic Affairs, Jozef Síkela, said that he reckoned that the savings targets would initially be voluntary. His country currently holds the rotating presidency of the EU Council and coordinates the deliberations of the countries.
Traditionally, member states are very reluctant to give Brussels powers that could restrict their own government action too much. This is especially true when it comes to such a sensitive issue as electricity and gas supply.
According to reports, Bulgaria, Greece, Poland and Hungary are among the countries that only want to save voluntarily, as with the EU’s gas savings targets. With the EU’s gas savings plan, savings are voluntary – at least until three member states declare a national emergency and ask the EU Commission to trigger a Union alarm.
Von der Leyen apparently did not allow himself to be deterred by the concerns at the ministerial meeting. A current draft of the planned law is currently circulating in Brussels. In the current text of the law, the von der Leyens continue to rely on the obligation to save.
At peak times, states are supposed to reduce their electricity consumption by a certain percentage. However, it is not clear how high this should be. In the current draft, there are only placeholders instead of numerical values. In earlier drafts that have become known, there was talk of five percent.
“This mandatory target would mean selecting three to four hours per weekday, which would normally correspond to peak consumption times,” the draft reads. “But they could also include hours where low electricity production from renewables is expected.”
Von der Leyen wants to officially present the bill on September 14, when she also gives her annual State of the Union address. The law is expected to be adopted by member states by the end of the month. Von der Leyen is apparently certain that the member states will agree on an obligation to save by then.
The politician probably knows that Germany and France are on the supporter side. The power-saving obligation would hardly be enforceable against Berlin and Paris. Because it is about measures for the energy market, the member states only have to agree with a majority and not unanimously.
The other elements of the contingency plan for lower electricity prices that von der Leyen plans to present are less controversial. Skimming off profits from electricity producers who generate electricity from cheaper sources than gas is key.
There should also be a solidarity levy from oil and gas companies that are currently making high profits. However, the rules for liquidity support for utilities, which currently have to deposit more money with banks as collateral when trading in the volatile electricity market, will come later.
This is due to the complicated matter, according to those close to the commission. Not because of the resistance of the member states.
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