Seven countries warn the EC against changing the structure of the energy market

The governments of seven EU countries have warned the European Commission against interfering in the structure of the energy market amid Brussels’ attempts to reduce energy bills, Reuters reports.

In a letter to European Commissioner for Energy Dan Jørgensen, the seven countries warned that changing the system underpinning Europe’s energy market would lead to a less efficient mechanism and ultimately increase bills.

«Interference in the structure of the electricity market and changes to pricing mechanisms will also increase market and regulatory uncertainty, which is detrimental to investment and European competitiveness,» the letter, seen by the agency, said.

The letter, dated March 5, was signed by the Netherlands, Sweden, Denmark, Finland, Latvia, Luxembourg, and Portugal.

The signatories noted that the root cause of high prices is the EU’s dependence on expensive imported gas, not the structure of the energy market. Instead, they called on Brussels to accelerate the expansion of cheaper renewable energy sources in order to limit the role of gas in pricing. They also proposed strengthening measures that encourage consumers to use energy when prices are low.

This position contradicts the actions of other governments, notably Italy. The country recently announced national plans to reimburse gas-fired power plants for the cost of carbon allowances under the EU ETS, and this intervention could disrupt the pricing system.

Signatory states, including Sweden and Finland, have the lowest electricity prices in the EU, as more than 90% of their electricity is produced from low-carbon sources.

This year, energy prices have become an important issue on the European agenda amid warnings from industrial companies that they cannot compete with companies in the US and China, where energy bills are lower. The sharp rise in global oil and gas prices due to the escalation of the conflict in the Middle East has increased pressure on the European Commission.

In February, the Alliance of Energy-Intensive Industries issued a statement. It called on the European Commission to ensure that the Electrification Action Plan (to be presented in May) takes into account a number of priorities, including setting a competitive benchmark of €50/MWh for total electricity costs for industry.