The leaders of three of the main European electricity companies –Iberdrola, Enel and EDF– have come together for the first time in history, in an article published in Politico Europe, to ask for a ceiling throughout the European Union so that gas prices return, at least, to pre-crisis levels.
Ignacio Galán, Francesco Starace and Jean-Bernand Lévy They have expressed their astonishment at the fact that there is a growing number of interventions in the electricity market due to the energy price crisis, but that the gas markets have not yet been intervened. And it is that “gas prices are the main driver of electricity prices and, obviously, the sale prices of natural gas do not adjust to the real cost of supply”, they have warned.
According to industry leaders, these interventions have only focused on trying to capture the well-known heaven-sent profits obtained by electricity producers, often based on “misconceptions”. “They assumed that the high prices of the day-ahead market mean unexpected income for electricity generators not subject to gas prices, and vertically integrated companies. But they ignore that most of the energy does not receive the price of the day, since most electricity is sold in advance to consumers through supply contracts”, they have exemplified.
In the article, the businessmen have branded the proposal of the European Commission on safeguards and limits for the application of these measures in member countries. However, they have pointed out that this is insufficient, as solutions must be applied at EU level. “These uncoordinated interventions in the market distort and end up destroying the integrated electricity market, which is based on a common price formation rule throughout the EU,” they stressed.
structural changes
Regarding structural measures, Galán, Starace and Jévy believe that it is necessary to develop liquid futures markets and long-term price signals to play an even greater role, helping to cover risks and facilitating investments.
Thus, “structural solutions must allow the acceleration of the deployment of reliable and flexible zero carbon technologies”, they stated. For them this is the only way to eliminate the dependency on gas from the energy system.
Leaders have also noted the importance of promoting interconnections and infrastructures in order to provide flexibility and reliability to the system and optimize the use of our current resources. For them, the energy crisis is the necessary push to accelerate the energy transition. “A Europe that rapidly builds carbon-neutral technologies, that electrifies transportation and home heating, and that diversifies fuels for heavy industry is a more sustainable, more citizen-oriented and more independent Europe,” they concluded.
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