By Paul Homewood
High energy prices here to stay:
Europeans will pay an extra 350 billion euros ($395 billion) in energy bills next year as global demand for fuel and energy threatens to drive prices up, according to Greece’s energy minister.
Kostas Skrekas said a new mechanism to help protect the most vulnerable citizens and medium-sized businesses from price increases should be created at the European Union level. It comes as officials from Hungary and Spain expressed concern about recent volatility in the carbon emissions market at a meeting of environment ministers in Brussels.
“Faced with this extraordinary situation, we couldn’t help but deal with it,” Skrekas said. Greece has estimates At the beginning of this year, Europeans will face an additional €100 billion increase in this winter alone.
Europe’s energy crisis is straining national budgets and has become one of the EU’s biggest political challenges, fueling inflation as well as governments facing the spread of climate change. omicron virus. Member states have made a number of proposals, from redesigning the way electricity markets work to limiting the bloc’s carbon trading market.
Across the continent, prices per megawatt hour (MWh) have now exceeded €300 (£256) in most countries. With the exception of Poland and Scandinavia, all countries in Europe have broken the €300 MWh barrier with France and Switzerland almost at €400 (£341.60). Head of Analytics at research firm Enappsys Andre Bosschaart said he has “never seen this kind of volatility and high prices” and added that tomorrow’s price predictions suggest France and Germany will surpass MWh 400€ (£341.60). Nathan Piper, head of Oil and Gas Research at Investec, described the prices as “extraordinarily high,” adding that gas prices are now 10 times higher than in the US in Europe.
$395 billion is a staggering amount, perhaps on top of this year’s bull run. It equates to $890 per capita.
It’s clear that prices won’t drop anytime soon, if at all. Indeed, this is exactly the scenario the EU has been planning – pushing energy prices up to a level where renewables are competitive.
The only way to bring prices back down is to increase production of oil, gas, and coal. Under normal circumstances, a rising market price would encourage this. However, EU policy is holding back this.