EC Will Help Member States to Respond to Price Hikes Challenge

The EC will design a "toolbox" of measures, that Member States can implement to respond to latest energy price spikes without breaching the Union's market rules, as consumers face a sharp rise in bills with winter approaching. The power prices in EU have accelerated this year, more than trebling in Spain and elsewhere, mainly fuelled by the rising price of natural gas used for power generation and heating, Reuters reported.

The latter came on top of low renewable energy output and higher EU carbon prices.

Energy Commissioner Kadri Simson confirmed Brussels would produce guidelines to help countries tackle the price spike in the coming weeks. "I proposed to the ministers today to draw up a more structured toolbox, which we believe could be useful for all member states to tackle the current situation," Simson said, following a meeting of energy ministers from EU countries.

The toolbox is expected to governments navigate options to respond quickly to price spikes within EU rules, Simson said, noting they can tweak value-added tax (VAT) and excise duties or use direct support to shield consumers from high costs.

Benchmark European gas prices have risen by more than 250% since January, spiking as economies around the world reopened from Covid-19 slowdowns, with high demand in Asia pushing down supplies to Europe. It has sent shockwaves through gas-reliant industries, which include everything from power generation to makers of CO2 used in the food trade.

Spain has initiated calls for the EU to organise a more coordinated response to the price spikes. On Monday, it asked the Commission to provide options for how EU states could respond, and suggested reforming the bloc's electricity market. Simson said the design of Europe's electricity...