Kyriakos Mitsotakis called on Brussels to urgently deal with “prolonged crisis» capacity which has driven energy prices to such extreme levels that requires an urgent “political response”.
In a letter to the European Commission seen by the Financial Times, Mr Mitsotakis said electricity prices rose in August from €60 per megawatt hour to €130 per MWh. He called on Ursula von der Leyen to use her second five-year term as Commission president to “take on the task of promoting more cross-border capacity”, so as to avoid such issues in the future.
Factors contributing to the spike in prices in Greece, Hungary and Romania included hot weather, power outages and low rainfall, which had left reservoirs feeding hydroelectric plants dry.
Russian attacks on Ukraine
Greece has warned that Russian strikes on Ukrainian infrastructure have helped to more than double electricity prices this summer in south-east Europe, underscoring the vulnerabilities of EU energy markets.
Mr. Mitsotakis emphasized that Russia’s attacks against Ukraine’s network were also a key driving force. Kyiv was previously a net exporter of electricity, but this year began importing significant amounts of energy from its EU neighbors.
After heavy Russian bombing in the first half of 2024, Ukraine increased electricity imports by almost six times compared to 2023, according to ExPro Electricity data. “This is yet another cost that Russia’s destructive war is imposing on our economies,” the deputy minister wrote.
Mr Mitsotakis also called for better oversight of the electricity market, which he described as “an incomprehensible black box – even for experts”.
The energy market is a black box
“We feel there is a mini energy crisis that no one is talking about,” a Greek government official said ahead of the letter being sent to Brussels on Friday.
Energy prices have become a key concern for policymakers, who are trying to devise ways to improve Europe’s lagging global competitiveness.
Former Italian prime minister and European Central Bank president Mario Draghi noted in his report on the competitiveness of the euro economy that European companies face electricity prices that are at least two to three times higher than their US competitors.
“Energy prices have also become more volatile, increasing the price of hedging and adding uncertainty to investment decisions,” Draghi said.
Investments of €584 billion in electricity networks by 2030
Ursula von der Leyen said after Draghi’s report was published that “cross-border energy networks” were an example of “critical … common European projects” that could potentially be financed by a strengthened EU budget.
The objectives of the Commission
The Commission has estimated that €584bn of investment in electricity networks is needed by 2030 if the bloc is to meet its ambitious climate targets. It has also set a target for EU member states to have electricity cables that would allow 15% of their production to be available to neighboring countries over the same period.
Mitsotakis also highlighted the problem in a speech last week in Thessaloniki, during a press conference in which he highlighted the region’s persistent problems with high electricity prices.
“There is a fundamental distortion in the South-East European energy market,” he said. “Something isn’t working right. I don’t expect immediate solutions, but at least let someone deal with it.
Source: ot.gr
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