Strong movement is observed these days at the European level, regarding the proposal submitted by Greece, Romania and Bulgaria to take measures to address the high prices in the wholesale markets of Southeast Europe.
The issue is expected to concern the Council of Energy Ministers that will be held on October 15 in Luxembourg. Indicative of the importance attributed to this particular proposal is that it figures high on the agenda: “Wholesale electricity prices. Ministers will hold a discussion on the divergence of wholesale electricity prices within the EU,” the relevant announcement states.
And the discussion on preparedness for the upcoming winter season will follow: “The Commission will brief ministers on the security of supply in the EU. Then German Galushchenko, Minister of Energy of Ukraine, will present the state of energy in Ukraine”.
“I have been told that Romania’s request, submitted jointly with Bulgaria and Greece, has been accepted by the European Commission for discussion at the Council of Ministers in Luxembourg on October 15. This request concerns the creation of a functioning energy market,” Romanian Energy Minister Sebastian Burduja said at a press conference.
He also said that the three countries fully comply with European rules, including those related to decarbonisation and the green transition, and therefore require “equal rights”, and in particular “access to energy at competitive prices comparable to those paid by other EU states”.
What drives prices up?
Burduja also identified two key factors contributing to the current situation. The first is the lack of energy interconnections in Central Europe, particularly in Austria and Slovakia, which prevents the flow of cheaper Western energy to Eastern Europe. Second, there is increased demand for energy from Moldova and Ukraine, which is driving up regional prices.
“In the medium and long term, the best solution is to extend interconnection capacity to countries that have not yet met these commitments. Our aim is to put fair and constructive pressure on Austria, Slovakia and potentially other countries in the energy union to strengthen their interconnection capabilities. It is possible that, at times, energy from the East is cheaper than in the West, but it cannot flow in the opposite direction,” explained Burduja.
The Greek initiative
It is noted that, on the initiative of the Greek Minister of Environment and Energy, Mr. Theodore Skylakakis, a relevant, joint letter was sent (27/9) to the EU Energy Commissioner, Mrs. Kadri Simson, which is co-signed by the Minister of Energy of Romania, Mr. Sebastian – Ioan Burduja and the Minister of Energy of Bulgaria, Mr. Vladimir Malinov.
In the context of the letter, the three Ministers point out that price volatility in Southeast Europe has put significant pressure on the countries’ economies, threatening both energy security and market stability across the region.
The key issues they raise include:
- H lack of interconnection capacity: The lack of cross-border interconnections hinders efficient electricity flows in the South East Europe region at critical times, exacerbating price increases, especially during peak evening hours when Renewable Energy production is reduced. Developing these missing interconnection links is crucial to easing congestion and converging cross-border prices.
- O fragmentation of energy markets: The limited integration of regional electricity markets with the wider EU system has led to significant price divergences, with disparities often exceeding 50-100 euros/MWh. To restore market coherence and improve price stability, it is necessary to accelerate infrastructure investment and to integrate our markets more closely with the EU market.
- H reduced flexible production capacity: The availability of flexible sources of generation, particularly hydropower, has been limited by prolonged droughts, leading to greater reliance on coal and natural gas-fired plants. This situation highlights the urgent need for investments in flexible and clean production capabilities.
- Ogeopolitical factors and security of supply: The reversal of traditional electricity flows due to Ukraine becoming a net importer from the Southeast European region is putting further pressure on the system, pushing up prices.
Proposed measures to address the situation
Given these challenges, the letter emphasizes the need to take the following measures to address the situation:
- Short term measures: Immediate measures should be considered, such as the taxation of the surplus income of electricity producers and traders. Revenues from this taxation could be redistributed to ease the burden on consumers and stabilize the market in the short term.
Cooperation between national regulatory authorities for market surveillance should also be strengthened.
- Long-term measures: The European Commission should prioritize the development of basic interconnection infrastructure in South East Europe.
In this light, the main requests of the three countries to the European Commission are summarized as follows in the joint letter:
- Prioritize the development of interconnection networks in South East Europe, to close the infrastructure gap that isolates the region from the wider EU market.
- Strengthening cross-border interconnection capacity, with a view to price convergence in the single market, especially during peak demand periods.
- Implementation of short-term financial measures, such as taxing the “skyrocketing” profits of producers to stabilize the market and relieve consumers.
- Strengthen market coupling and regional cooperation to promote price harmonization and improve energy security across South East Europe.
It is highlighted that the letter to the EU Energy Commissioner is accompanied by a joint technical memorandum developed by the three countries, together with a note from the respective Transmission System Operators, which describes the main factors that have led to the price increase.
The three countries believe that coordinated action, at the EU level, is necessary to address the challenges and ensure the resilience of the energy market in the region.
Greece, Romania and Bulgaria are committed to working closely with the European Commission to implement these critical measures and promote a more secure, efficient and affordable energy future.
SOURCE: ot.gr
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