Belgium’s energy minister fears five to 10 harsh winters in Europe. The European Commission is now working on crisis measures against peak electricity prices in Europe. Many countries are begging Norway for more and cheaper gas.
According to the Belgian newspaper, D StandardPrime Minister Jonas Gahr Store responded “coolly” to Belgium’s plea for cheaper gas, when he met fellow Belgian Alexandre de Croo in Stavanger on Monday.
“The Norwegian prime minister is not eager to contribute to reducing our gas bills,” the newspaper wrote on Tuesday.
In several rounds, Belgium called for a gas price cap. Alexander de Croo is the latest in a line of European leaders to call Norway’s prime minister and ask for larger shipments of Norwegian gas – and a price that means their residents are getting electricity prices they can live with.
Warning
Belgium’s Energy Minister, Tinne Van der Straeten, has taken even more difficult measures, calling for an immediate freeze on gas prices:
According to the BBC, it said on Monday that EU countries faced “five to 10 harsh winters” if nothing was done immediately to control soaring energy prices.
You should talk to the companies
Støre was not available for comment on Tuesday. But Minister of Oil and Energy Terje Aasland (AP), who attended the meeting, told this to VG:
– I think it was a good meeting.
He adds:
Jonas was worried that the procedures should be thought through. Several countries have approached Norway about long contracts to deliver gas at reasonable prices. He says the same thing to everyone: you should contact the companies that operate on the Norwegian continental shelf. There are those who are responsible for gas sales.
– Did Europeans get the impression that Norway is not particularly willing to contribute to the acute electricity price crisis at the present time?
This year, Norwegian companies will deliver more gas to the European market, equivalent to an additional 100 TWh compared to last year. That’s nearly two-thirds of what the Norwegian energy system produces. It is a great contribution. Aasland responds to companies on the shelves out of a desire to be a predictable player, and I think they do that in a very good way.
Norway previously received Criticism of Polish Prime Minister Mateusz Morawieckiwho believed that Norway is making money indirectly from the war in Ukraine and that Norway should share the oil and gas profits.
The European Union intervenes
Now the European Union will also intervene in the electricity market. European Commission President Ursula von der Leyen announced the news in a few days:
We have to develop a tool that can be put in place over the next few days and weeks, ensuring that the price of gas no longer controls the price of electricity, von der Leyen said in Berlin on Monday evening.
uninvited
EU energy ministers will meet for informal talks in Prague next Friday, September 9. Aasland says he was not invited to this meeting, but it was not the norm for Norway to be invited to informal meetings either.
Nor has the EU consulted the government about what actions it might take.
– It is not unusual for the European Union to think about what can be done in this case. We’ve already taken several measures, such as requiring electricity producers to hold water in tanks when the fill is low, and a management mechanism that can ensure supply security by somewhat limiting electricity exports, Aasland tells VG.
Is the European Union considering separating the price of electricity from the price of gas?
– It’s an interesting proposition, although I know nothing of how to arrange it. But Europe has lived well for two decades by buying spot gas. We think the best thing over time is to not step in and frustrate the gas market as it is now, when scarcity and uncertainty are causing the situation and prices, says Asland.
intrusive price cap
One possible measure from the European Union is to set a direct price ceiling for electricity. It’s going to be very prolific, Fabian Roningen, an analyst at Rystad Energy, tells VG.
– Because if the price of energy sources like coal and gas is higher – he asks who will pay the deposit.
But Rønningen says the EU can draw on experience from the member states, Spain and Portugal, which have implemented a gas price cap for a period:
– Since it is the price of gas that largely determines the price of electricity in these countries, they have succeeded in reducing the price of electricity production, so that the state pays the intermediate payment. This has worked effectively there, he says.
According to Rønningen, another alternative is for the EU to copy Norway’s electricity subsidy by compensating consumers and covering a high percentage of their electricity bill at prices above a certain level.
But the Rystad analyst explains that this also has a drawback:
– It removes the incentive to save electricity, which the market is already good at, says Rönningen.
Correction: In an earlier version of this story, the Prime Minister of Belgium was named Alexandre de Croo. His name is Alexandre de Croo. The error was corrected at 18:07 on Tuesday, August 30th.
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