EU ministers meet to discuss ‘energy war’ as electricity bills rise

BRUSSELS (Reuters) – European Union energy ministers met on Friday to seek agreement on ways to protect citizens from sky-high energy prices and prevent the collapse of public utilities. electricity as Russia gradually cut off gas supplies to Europe in the stalemate over Ukraine.

EU diplomats say member states broadly support proposals to help electricity suppliers avoid being crushed by a liquidity crunch, but are divided over plans to cap Russian gas prices.

Russia, which provided Europe with a third of its gas supplies until its invasion of Ukraine sparked a crisis, said it would halt supplies altogether if a cap was imposed.

Friday’s ministerial talks aim to narrow the options to those with broad support before presenting formal proposals, rather than reaching a final decision.

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“We are in an energy war with Russia,” Czech Industry Minister Jozef Sikela said upon arriving at the emergency meeting in Brussels. “We need to send a clear signal that we would do whatever it takes to support our households, our economies.”

Energy bills, already rising as gas demand recovered from the COVID-19 pandemic, soared further after Russia invaded Ukraine and the West imposed sanctions on Moscow . Governments have tried to limit the price shock.

The European Commission has offered to offer emergency liquidity to power companies facing growing collateral demands, a move diplomats said EU governments broadly support. Some also support proposals to reduce electricity demand.

“I’m pretty sure we’ll align with the liquidity measures to help businesses,” Sikela said, adding ministers would work to reach an agreement to “calm the markets and not make them jittery.” .

But diplomats said the price cap proposal has divided opinion, with some saying it would not help as deliveries from Moscow to Europe have plummeted. Some Central European states that still receive Russian gas fear losing it altogether.

“There’s not a lot of Russian gas coming to Europe, so I don’t see the added value of that (a Russian gas price cap),” Belgium’s Energy Minister Tinne told Reuters. Van der Straeten.

The Baltic states are among those backing the idea, saying a cap would starve Moscow of money to fund military action in Ukraine.

“Russia said if you want our gas, cancel the sanctions. It’s blackmail. We can’t back down, we have to be united, we have to have the political will to help Ukraine win,” he said. Estonian Economic Affairs Minister Riina Sikkut. .

The idea of ​​recouping revenue from gasless electricity generators and spending the money to reduce consumer bills has also met with resistance in some European capitals.

The EU proposal would cap the price paid to non-gas generators for electricity at 200 euros ($199.86) per megawatt-hour, applying to wind, nuclear and coal-fired generators, according to a draft seen by Reuters.

France, home to Europe’s largest nuclear fleet, has questioned whether the same limit should be applied to all generators.

EU ministers will observe a minute’s silence at the start of their meeting, in memory of Britain’s Queen Elizabeth, who died on Thursday after 70 years on the throne.

(Reporting by Kate Abnett, Bart Meijer, Marine Strauss; Additional reporting by Benjamin Mallet, Philip Blenkinsop, Gabriela Baczynska; Writing by Kate Abnett and Ingrid Melander; Editing by Edmund Blair)

Copyright 2022 Thomson Reuters.

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