Greece asks EU for urgent response to soaring power prices

Reuters   2024-09-23 15:00:06

Greece's prime minister has asked the EU to urgently respond to soaring power prices in central and eastern Europe, which Athens said are being exacerbated by Russian attacks on Ukraine's energy infrastructure.

In a letter to the European Commission, Kyriakos Mitsotakis asked Brussels to create a bloc-wide regulator with powers to inspect energy markets across the EU, and urged the Commission to support cross-border infrastructure projects to transfer power between countries.

Power prices in Greece more than doubled from 60 euros per megawatt hour in April to 130eur/MWh in August, the letter said.

Mitsotakis blamed the price spike, which has also affected countries including Romania and Bulgaria, on factors including soaring temperatures this summer, power infrastructure outages, and hydropower reservoirs dried out by climate change-fuelled drought.

But he said an additional burden has come via Ukraine, which has become increasingly reliant on power imported from other European countries. Russian attacks have knocked out half of the country's power generating capacity this year, Ukrainian officials have said.The EU agreed an upgrade of its power market rules last year to try to encourage more fixed-price contracts with power generators and protect consumers from volatile energy markets.

But the price of power in Europe - even in countries which have rapidly increased local renewable energy production - is still often pegged to gas-fuelled power plants, which can expose prices to sharp fluctuations in fuel markets.

Gaps in interconnector capacity between countries and congestion in local electricity grids can also push up prices.

Greece's energy minister said the unified EU electricity market was not working for southeastern Europe, and that it would work with Romania and Bulgaria towards a permanent solution to soaring power prices in the region.

A joint initiative is being taken by the Greek, Bulgarian and Romanian energy ministers to create "a permanent intervention mechanism whenever extreme prices are recorded, due to the cut-off of southeastern Europe from the rest of the European energy market".

The conservative government last month extended a windfall tax on energy companies to finance power subsidies for consumers struggling with the rising energy cost.

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