A European Union-wide cap on electricity prices and major reform of the EU’s energy market is urgently required to address soaring bills, according to Fine Gael MEP, Colm Markey.
The Midlands North West MEP said the current system is not fit for purpose because currently, wholesale electricity prices are linked to the price of gas.
That is despite only 21% of EU electricity being produced from gas, with the vast majority coming from renewables, the cost base of which, has not changed significantly as a result of the crisis, the MEP has said.
“Only a fifth of the electricity generated in the EU comes from gas, while two thirds comes from renewables, yet we’re in a situation where electricity prices continue to be directly linked to the price of gas,” MEP Markey said.
“We should have a price based on the cost base of the 80% of the market that hasn’t been affected, rather than the most expensive 20%.
“At a time when homeowners and businesses face astronomical bills, emergency intervention is needed. The EU must look at price caps and changing the rules to decouple electricity and gas prices altogether.”
The MEP, who is also a dairy farmer said that this topic should be top of the agenda at an emergency meeting of EU energy ministers next week.
“Changes to the EU’s electricity market have been resisted by some member states in the past but we are in unprecedented times and solutions need to be found as a matter of urgency,” he continued.
“We also have a fundamentally changed supply profile where gas plays a smaller part and that should be reflected in the overall framework.”
Farming and electricity costs
Recently back home, the Irish Farmers’ Association (IFA) claimed that the current energy security concerns reflect a “failure by the state” to foster the development of a fit-for-purpose farm renewable energy sector in Ireland.
President of the association, Tim Cullinan said: “Farmers across all sectors are grappling with massive increases in energy costs as they face into the coming winter.
“Unlike many of their European counterparts, Irish farmers were not given the opportunity or assistance to generate on-farm renewable energy which would have helped reduce the electricity demand of Irish farms and also improve energy security at national level.
“It represents a massive missed opportunity,” he stated.