Major energy market players agree European energy consumers could face many more rounds of pressure over the next few years as a result of errors and inaccuracies plaguing the EU’s energy transition plan towards renewables.
Energy market players are not doubting the EU’s decarbonization goal, seeing it as irreversible, but do believe the European Commission must rectify, as soon as possible, current mechanism faults and market distortions whose resulting deficiencies are being exploited by traders and monopolies, such as Russian gas giant Gazprom, earning excessive revenues at present.
Europe appears to have trapped itself in mechanisms that do not seem to be working, fueling rising concerns among enterprises and industrial players.
Measures must be taken right now at national and European levels. For instance, windfall profits, sparked by sharp wholesale price increases, need to be stopped through the introduction of related taxes, as has been the case in Spain, market players suggest.
Also, electricity prices need to cease reflecting the spot market’s surging prices and instead be shaped by the actual cost of the energy mix, comprised of low-cost renewables (30-35%), high-cost natural gas (30%), lignite (10%), hydropower (10%), plus imports.
In addition, green PPAs reflecting actual cost need to player a bigger role. In Germany, for example, 90 percent of electricity supply is currently made available through PPAs.
Fearing this crisis could last, industrial players in Greece are moving to secure futures contracts covering supply for the next three to four years.