Presented by Enel

Electricity prices are hitting record highs across the EU — and there’s worry that could spark a broader political backlash against the EU’s climate policies. The Green Deal project to make the bloc climate neutral by 2050 will use price signals to discourage carbon emissions. But the ongoing power price spike, caused by surging natural gas prices, is highlighting the political risks of making energy more expensive. The Commission is all about renewables at the moment: Brussels believes that the more clean energy there is, the less consumers will have to depend on fossil fuels with volatile prices.

It’s not that there’s a direct link between the current price spike and green policies like the Emissions Trading System (ETS). Rather, power prices are so high because they’re piggy-backing on soaring natural gas prices, used across Europe to generate a key percentage of electricity. That’s leading to calls from some countries to revamp the EU’s power market design, limit price increases imposed by utilities, investigate Russia for exporting too little gas, and use revenues from the ETS to help out cash-strapped consumers.

Key questions to be addressed include:

• Does the EU need to rethink the wholesale electricity market?
• Will the price shock derail the EU Green Deal objectives? Are renewables the long-term solution to the rising of electricity prices?
• Does the EU’s Energy Union policy of creating a unified and liquid gas market need to be refined?
• What does the current situation say about the political and economic capacity to handle higher energy prices as part of the green transition? What does it mean for the industry and future investments?
• Is the best response to the price surge an even faster conversion to renewable energy?
• Is the industry’s argument that natural gas should serve as a medium-term fairly clean but stable conversion fuel now in tatters?
• Does the current price spike strengthen the arguments of nuclear advocates, and how will that play out in the EU’s ongoing sustainable finance taxonomy?

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