Austrian Chancellor Karl Nehammer called on Sunday for the EU to impose a cap on power prices and decouple electricity charges from the price of gas. The Austrian leader said failure to do so would let Russian President Vladimir Putin “determine the European electricity price.”
“We must finally stop the madness that is taking place in energy markets. And that can only happen through a European solution,” read a statement from Nehammer’s office. “Something has to happen at last. This market will not regulate itself in its current form. I call on all the EU 27 to stand together to stop this price explosion immediately.”
The EU relies on Russia to supply around 40% of its gas, and government-led efforts to stockpile this precious resource in preparation for winter and a potential supply cutoff have compelled companies to buy, rather than sell, and driven up prices. This distorted market is compounded by some EU countries refusing to purchase Russian gas in rubles, as Moscow has demanded, and EU sanctions on Russia impeding maintenance work along Russia-Europe gas lines.
Electricity prices across Europe are tied to the price of gas, which now costs around ten times what it did last year. However, while some EU countries are heavily dependent on Russian gas for heating and industry, they use alternate fuels to generate electricity. Austria, for example, generates more than three quarters of its electricity from renewables, per 2020 figures from the International Energy Agency.
Nehammer argued that decoupling electricity and gas prices would result in a fairer bill for consumers that more accurately reflects electricity production costs.
“We cannot let Putin determine the European electricity price every day,” he added, referring to Russia’s control of much of Europe’s gas supply.
The Czech Republic, which currently holds the rotating EU presidency, announced on Friday that it will convene an energy crisis summit “at the earliest possible date,” during which price caps will be discussed.
Putin has likened the EU’s attempts to cut itself off from Russian fossil fuels to economic “suicide.”
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