The European Commission has finally decided to adopt state intervention measures in energy markets, mainly electricity, after much delay, essentially accepting the failure of markets to produce desired results, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, has noted in an analysis.
Major energy price increases needed to spread throughout Europe for Brussels to decide to intervene, the energy expert noted.
Fixed price offers and price hedging contracts – which, in many countries, secured, over a considerable period, relatively stable retail electricity prices not reflecting rising electricity prices at energy exchanges – have become impossible to maintain as a result of the extended energy price crisis, the professor pointed out in his analysis.
Consumer prices are now skyrocketing virtually everywhere in Europe, increasing the risk of bankruptcies, a perilous situation that has prompted EU governments to push the European Commission for state intervention proposals, the professor underlined.
During this crisis, electricity markets have failed to achieve consumer prices at levels reflecting the true long-term average cost of electricity, as healthy competition would, the professor noted.
Given the exorbitant natural gas prices at present, green hydrogen would represent a lower-cost alternative, if infrastructure was in place, the professor noted, concluding green transition is the only positive way out of the problem, as has now been recognized by all.