Spain urged the European Commission on Monday (20 September) to devise guidance to help member states react consistently to power price spikes without testing the rules of the bloc, and suggested moves to limit carbon market speculators and build up gas reserves.
Benchmark European gas prices have rocketed by some 250% this year, due to low stock levels, high demand in Asia, and outages, dragging up wholesale electricity costs.
In Spain, wholesale electricity prices have more than trebled since December, sparking a political blame game. The government moved last week to cap prices and limit power companies’ profits.
On Monday, Economy Minister Nadia Calvino and Energy and Environment Minister Teresa Ribera sent a document laying out their views to the European Commission.
“Member states should not need to improvise ad-hoc measures every time markets malfunction, and then hope that the Commission will not object to these,” the document said.
“We urgently need a European policy menu predesigned to react immediately to dramatic price surges.”
The Commission confirmed it had received the letter and said it would reply in due course.
Spain’s proposals include restricting the participation of certain traders in the EU carbon market, warning of the risk that “financial speculation rather than real factors drives prices up too quickly”.
They also called for the establishment of a centralised European platform to buy gas and start to build up strategic gas reserves, countering the bloc’s exposure to fluctuating international markets.
Last week, a Commission spokesperson said it was aware of the discussions about power prices in member states, and was monitoring the situation carefully.
“A well-functioning and well-integrated EU electricity market, continued investment in renewable energy and improvements in energy efficiency are key to keeping energy prices as affordable as possible for all consumers,” the spokesperson said.