Skyrocketing inflation, insane dependence on Russian energy, and risk of power outages. The European Commission is facing one of its most worrying winters. What solutions can you provide? And how do you plan to alleviate the impact of rising bills on citizens? The Commissioner for Energy, Kadri Simsonjoins us on The Global Conversation to tell us more about it.
The President of the European Commission, Ursula von der Leyen, recently announced that Russia will receive new sanctions. Waiting for these to cover what the previous packages left aside, Kadri Simson believes that it is the turn of Russian gas.
“Personally, I think it is necessary to introduce a price cap for Russian gas, because we don’t have sanctions on gas yet. But it is unfair that Russia, which is manipulating its supplies, partially covers the cut volumes with higher prices.”
However, there are many factors at play before considering the implementation of this measure, such as ensure security of supply before this winter and next year.
“We know that Russia does not have alternative gas pipeline connections that allow it to sell the gas, that it will not sell to its current buyers who do have valid contracts. They do not have the possibility of selling it to another. And that is why the price cap can be one more way for them to continue to have the only opportunity to earn some income. But they are cut off from access to the excess income that is also available to them,” Simson said.
“At the same time, the Member States have already done a lot. They have implemented measures to reduce global gas consumption and have been very successful in the activities of filling the reservoirs. So right now, our underground gas storage is full in more than 86%. And this is higher than what we had agreed in the middle of summer.”
On the other hand, some of the measures that have already been proposed by the Commission, both the solidarity tax and market revenues, still seem a bit difficult to implement.
“The price cap for these electricity producers who are producing electricity at significantly lower costs than, for example, gas plants…This money will be available for governments to use to support retail consumers and small businesses, and it will be available immediately. The solidarity contribution then refers to the income, to the excess income that the fossil fuel companies are obtaining this year. That means that it does not provide additional contributions before the end of the year, “explained the commissioner.
The commissioner ensures that we will not reach a situation in which European citizens are forced to reduce their demand, or actively save energy. Although it is a “reasonable attitude” that allows to reduce bills.
“Homes are protected customers. So even if we face the crisis and we don’t have enough supplies, homes will be protected… But right now, if millions of Europeans behave properly and don’t waste energy, that means our industry does not also have to face this situation, which must be rationed”.