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EU ENERGY MINISTERS are holding an emergency meeting today on how to tackle surging gas prices, with 11 countries including Ireland and Germany rejecting proposals from France and Spain for deep market reforms.
The ministers recognised the price hikes “jeopardised the integrity of the European energy market,” the chair of the meeting, Slovenian infrastructure minister Jernej Vrtovec, told a press conference.
But they agreed “we should not rush into rash decisions,” EU energy commissioner Kadri Simson said.
The gathering in Luxembourg was bookended between an EU summit last week called on the same issue and the COP26 climate summit next week in Glasgow.
It came against a backdrop of rocketing energy prices globally as many countries’ economies jump into high gear after a long hiatus forced by Covid-19 restrictions.
Europe, highly dependent on imported gas and oil, is seeing wholesale energy prices jump dramatically, mainly on the back of soaring spot gas prices that are the benchmark.
The two proposals
The European Commission has come up with a “toolbox” of measures to mitigate the short-term surge, mainly encouraging member states to cut taxes and levies that typically account for around a third of energy bills. This was widely endorsed at today’s meeting.
But Spain went into the meeting gung-ho to persuade the others to back its plan for EU countries to jointly purchase gas, the same way they did for the bloc’s successful Covid-19 vaccines procurement.
France, backing Spain, wants a redesign of Europe’s energy market to make gas a less important component in setting prices – something that suits its domestic energy mix, which is more than 70% supplied from nuclear power.
Nine countries including Ireland, Austria, Denmark, Finland, Germany and the Netherlands said in a joint statement issued just before today’s meeting that they opposed fundamental changes to the EU’s market.
“The internal market for gas and electricity has been jointly and gradually built over the past decades. Competitive markets contribute to innovation, security of supply and are thus a key element to facilitate the transition” towards the EU’s ambition for a low-carbon future, they said.
EU energy commissioner Simson said there was “broad consensus” that the current price hike was temporary and “caused by the extraordinary global gas demand – not our market design”.
“There is no denying that the current market situation puts Europe under pressure,” she said, but the focus needed to stay on the EU’s ambitions to become carbon neutral by 2050, which meant more investment in renewable sources.
“Changing the current model poses risks to market predictability, competitiveness and our clean energy transition,” Simson said.
Nevertheless, the ministers were open to Spain’s proposal for joint procurement of gas, “as an idea among others” being explored, she said.
Allies
One of the signatories to the statement, Luxembourg, said Sweden and Belgium had also signed onto the statement, bringing the total backing it to 11.
“The Spanish government is over-promising by saying joint energy procurement will solve the crisis. What will solve the crisis is efficiency investments,” Luxembourg Energy Minister Claude Turmes told reporters as he arrived for the meeting.
Spain’s energy minister, Sara Aagesen Munoz, countered that the energy price surge “is an extraordinary and urgent situation that requires urgent action”.
“Our proposal is totally clear and forceful,” she said, adding that she planned to win over her counterparts “with facts”.
“The energy transition, the ecological transition and the decarbonisation that Europe is committed to is only possible if consumers and industries perceive the benefits of this transition,” she said.
Irish wind
The meeting comes after Ireland’s Climate Change Advisory Council sent its first proposed carbon budget to Minister for Transport and Climate Eamon Ryan.
The budget is trying to create a map for Ireland to follow to meet the government’s target of cutting emissions in more than half by 2030 – a stepping stone on the way to its second key target of net-zero emissions by 2050.
The first proposed carbon budget, which will last until 2025, allows for a total of 295 million tonnes (Mt) of CO2 emissions between now and then.
Speaking RTÉ’s Today with Claire Byrne, Ryan said that Ireland embracing renewable power such as wind energy will help combat fuel costs in the long run as well as helping Ireland achieving its carbon targets.
“We’re at risk from high fossil fuel prices. We can’t control what goes on in Russia or Saudi Arabia or Asia, but we can tap into our own wind power, particularly offshore wind,” he said.
So by doing that, we think we can achieve a very significant reduction. It’s more competitive, it’s a no brainer for us to make this leap and make this change.
The safety of Ireland’s winter energy supply had been dependant on the the reopening of two gas-fired stations that were temporarily closed, the Bord Gáis-owned Whitegate in Cork and Energia-owned Huntstown in Dublin.
Speaking today, Ryan said that one of the plants has “come back repaired and the second is due back in the next week or two.”
© – AFP 2021 with reporting by Rónán Duffy
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I don’t know anything about energy pricing so can someone who does expand on this article? Why wouldn’t we get a better price by buying in bulk as a group?
@Edmund Murphy: We would. But that doesn’t sit with the ideologies of lots of political parties such as, say, Fine Gael… Private industry must benefit most as far as they’re concerned. This is just another example of our government actively screwing us all over.
@Edmund Murphy: I think the point is that the other members (I. E. Not the 11 mentioned) are taking the view that making prices cheaper is too short termist and will not stimulate the efficient development of alternative energy production.
In other words they see that prices should remain high enough for industry to have a reason to drive change and, in the meantime, governments should reduce the taxation portion for individual consumers to protect them in the short term.
Also they want to be seen to subsidise innovation with levies. People are just going to have to freeze this winter, apparently.
Maybe they should buy solar panels, both phev and water panels for all homes in EU, expand offshore windfarms and tidal power. Might create a few jobs to install them too.
@Luke: Don’t be talking sense.
To make a renewable grid work we will also need grid storage, that’s another good candidate for bulk purchase rather than gas if we are going that route.
@Luke: what you’d probably find is all the panels are made in China using energy from coal powered stations… :)
@Damo: True, but if they offset their Embodied Carbon over a reasonable period and have a long enough lifespan that they can make a reasonable impact.
A cradle to grave analysis would need to be part of the costing which would include Embodied carbon and recyclability. So French and German made panels might be more cost/carbon effective.
Quick bit of research “A typical solar panel will save over 900kg of CO2 per year that results in a carbon payback period of ~ 1.6 years.
As solar panels have an expected life of 25 years, even in areas where the sun’s radiation is received at less than 550kWh per m2 such as the northern UK, a typical solar panel takes around 6 years to pay back its energy cost.” source renewable energy hub uk
@Ignorant Carbon: What do you do in 25 years with all the old panels?
@Ignorant Carbon: thank you for that long and overly earnest reply.
@Joe Thorpe: Hopefully recycle them. I’m not saying I’ve all the answers, but there are smarter people than me working on that. At the moment there are processes at 80-95% recovery rates for panel materials (Glass, Silicone, Aluminium etc.)
@Damo: Sorry, it’s a hazard of my profession to make overly earnest replies and miss the smiley face
@Ignorant Carbon: They come from China. You know how many Panels they have recycled since year dot? Zip & apparently this post is like most landfills “toxic” lol
@Ignorant Carbon: I have both pv and thermal panels on my house and even after I buy oil I’m at zero cost after payback from roc’s and what I sell back to the grid . Although my house is ridiculously well insulated , generation is nothing without retention
@Joe Thorpe: Incorrect, stop spreading falsehoods and if countering claims provide some evidence.
There are a number of companies already recycling PV panels, for example in 2020 Veolia (PV Cycle) recycled 5000 tonnes of panels in france (over 250,000 panels) and recovered materials.
We are only starting to see volumes increasing as old panels reach end of life. Current panels (since 2012) are covered under EU WEEE laws meaning they are be required to be collected and recycled.
The materials are easily recycled (Glass and Aluminium) and have no loss of properties. The types of materials in PV panels make it commercially viable to recover and reuse.
@Peter Shannon: the Feed in Tariffs here are terrible, it’s a pity as it’s one of the barriers to higher adoption and change is still being delayed.
I’m looking at installing a small PV system at the moment, but with a small battery and EV should be able to store most of what we generate as we don’t have much roof space.
Solar panels are a good idea for people who have somewhere to install them.
I honestly don’t see how that would benefit the millions of people living in apartments. They don’t have attic space to store batteries nor, usually, the okay to set up solar panels on balconies.
@Ignorant Carbon: It’s not false, Sky News Bolt report stated they have not recycled a single panel let alone the millions of new ones that are about to be installed on a 25 Square kilometre site thats about to be built. He knows it I know it the Chinese know it & you deny it. They will go into landfill
@Joe Thorpe: Are you referring to the Australian show that quoted an ex-politician from a right wing socially conservative populist party? That’s not a source and Australia is not the world, and yes they have a poor ability to recycle panels.
I gave you an example of a european company recycling 250,000 panels last year. That disproves your claim of zero panels recycled.
Also to date Europe has installed about 25% of global PV panels which are governed under WEEE, so there is legislation in place to manage some of that E waste.
Yes there is more regulation to be put in place, and other regions have to also legislate for the future waste stream from PV Panels. But a material value stream of 15 billion dollars is not something that will be discarded, as waste streams increase they will be part of the circular economy model in Europe and hopefully further afield.
Þ
The UK and European gas prices surged as much as 18% last Monday after a keenly awaited pipeline capacity auction showed no increase from Russia either through the Ukrainian pipeline system or lines passing via Poland to northwest Europe. Traders and analysts say the auction’s result is the latest indication that Russia is in little rush to send additional gas to Europe, leaving supplies tight as winter begins and raising the prospect of shortages if the weather is colder than usual.
Putin and Kremlin officials now are clearly saying that the Nord Stream 2 pipeline must be opened before Europe can expect a substantial increase in natural gas supplies from Russia. Nord Stream 2 would enable Moscow to send more natural gas to Western Europe without paying transit fees to Poland and Ukraine. While gas supplies have tightened globally, the IEA said it believed Russia could boost exports by about 15% to Europe.
Can this news company set up a sister app, this one can stay as thejournal.ie and the sister app can be called theclimatejournal.ie just to unspam this one :)
@Hugo Bugo: Good idea! Maybe you could do the same and follow the comments on the sister site instead – y’know, just to unspam this one.
@Lee King Buckett: don’t worry Lee, I’m going nowhere, lol, but I do appreciate the witty rebuttal :)
“IRELAND IS virtually giving away its natural gas. An international study in 2002 found that the vast majority of multinational oil and gas companies pay other countries proportionately twice the amount that the Government is extracting from the Shell-led consortium that is exploiting the Corrib gas field”
This is why we need to stop backhanders/brown envelopes. Absolutely ridiculous
@Аня Владимировна: that’s a misinterpreted view, there is / was little to no infrastructure here for it so to incentivise investment and creation of said infrastructure the government gave substantial tax breaks. It would have made sense if they didn’t put people off investing here due to flip flopping on regulations and also the whole Shell to Sea debacle and lies to locals who now enjoy much improved local infrastructure and employment opportunities. 90% of investors were put off by that as claimed in an EY survey. Had we invested in it back then we would have our own energy security now as well as much of the infrastructure or ability to easily transition to offshore or floating wind / tidal, but we don’t. The short sightedness of certain groups in this country is crazy.
@This time its personable!: that’s a load of nonsense.
@Kevin Garvey: how do you see that then? Or what part is nonsense? You’d agree that brown envelopes etc is rife, if that’s the case where is the industry here and where are those with the brown envelopes? If j was dishing out brown envelopes to people to make something happen, I’d expect there to be something there at the end of it no? If it was Nigeria or Angola or Brazil perhaps you could say where is all the oil and gas money, but there is no industry here to speak of. Are you saying the tax breaks for exploration and development that existed are made up by me or are nonsense? Do you expect companies to come in and build from scratch as well as the millions it takes to develop everything on top of heavy taxation? If that’s the case you disagree with the IDA then also?
@This time its personable!: Yes, and they will because a lucrative market is worth their while.
@Fiona Fitzgerald: unless it’s under an existing licence they won’t as there is a ban on it under legislation. In my view not issuing licences due to a wish to transition to alternative energy sources would have been wiser and more flexible than putting into law. Would have allowed potential to develop if ever needed. Once again shafted by the Greens who’s knowledge seems to relate to buses and bikes. If you look at the Danes, Dutch, Norwegians and east coast of England, all have leveraged knowledge and infrastructure from existing offshore oil and gas marine elements to help them transition and develop wind facilities offshore quicker. We’ve lost the opportunity to develop gas, also on having the infrastructure and supply chain available to meet some of the requirements for offshore wind.
The base line for emission targets are set by 2018 standards.
How many data centres were online in 2018 compared with emission today? yet while data centres buy entire wind farms to reduce carbon taxes it will be household who Pay.
Dairy farmers have borrowed to increase output but it will be suckler farmers who will get punished. Banking profits must be protected. It should divide the farming community allowing Éamon Ryan to play each side against each other.
Without any alternative to fossil fuels, transport cost can only increase. Not a problem for government ministers still being drove around in diesel cars while preaching about electric. Leo likes a BMW while Simon c. needs a audi A6. Its past embarrassing how taxes are squandered.
It’s too late to be shouting now, they should have hedged a year ago when prices were at record lows. Energy is ant internationally traded commodity & gas which is one of the few relatively clean sources of energy that can provide immediate & on demand power is no exception. China is buying energy from anywhere & everywhere at whatever price is demanded & guess what? We can’t compete in a Dutch auction situation, we have limited storage we haven’t hedged & we are overly reliant on Russia & other countries over which their pipelines are located & we are at the end of that line wind doesn’t power our central heating & recently it didn’t power much else either.
@Joe Thorpe: I’m wondering why certain politicians feel the need to defend competition among prosperous gas suppliers. Surely as people have said here, it’s more in the interests of the people of Ireland to stabilise the rising prices by buying in a bulk deal?
@Fiona Fitzgerald: They won’t get it cheaper bulk buying we will just be locked in at todays high prices, We are competing with China, India & the rest of the world for a limited supply of gas & oil. The United States has reduced its fracking & is importing whereas before Biden it was a net exporter of both Oil & Gas so that has allowed other producers to raise their prices which will push inflation. Trump threatened the Saudis if they wanted defence purchases to go through they’d better open the taps for oil & gas.
Ireland is also the highest per capita emitter of this chemically same gas in the EU.
Nuclear power is the only way.
@Photos Tipperary: Grand, we’ll store the toxic waste in barrels under fields in Tipp, will we?
Russia leveraging the EU to facilitate tax evasion on their pipeline plus opec blaming covid related fuel facilities staff shortfall has us were we are, political will or the lack there of is another factor, the general slow nature of politicking in Europe along with the obvious mindset ‘we won’t be held over a barrel by the bully ruskies’ ( no pun intended ) leads to little change left in your pocket. On a serious note keep an eye on the elderly this winter. The insipid incumbents in Kildare st certainly won’t t.
Russia leveraging the EU to facilitate tax evasion on their pipeline plus opec blaming covid related fuel facilities staff shortfall has us were we are, political will or the lack there of is another factor, the general slow nature of politicking in Europe along with the obvious mindset ‘we won’t be held over a barrel by the bully ruskies’ ( no pun intended ) leads to little change left in your pocket. On a serious note keep an eye on the elderly this winter. The insipid incumbents in Kildare at most certainly will not.
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