BRUSSELS/LONDON: Proposals from southern European countries to intervene in energy markets have highlighted the difficulty facing an EU summit this week as it seeks to respond to record prices driven by Russia's invasion of Ukraine.
They are expected to contain steps countries can implement on a national basis when coordinated intervention has divided opinion. Portugal and Spain last week said they had drawn up proposals to impose a €180 per megawatt hour price cap in Europe's wholesale electricity spot market, and would push ahead with the plan even without EU backing.
Some countries have already imposed price caps, with France freezing domestic gas prices last year by compensating gas companies for selling below higher spot prices. "We are very reluctant to intervene in markets, because we want to avoid disrupting markets in the short term as that could hinder investments in sustainable energy," Dutch climate minister Rob Jetten said on Thursday.
The overall electricity price is set by the cost of bringing the last unit of power to the market needed to meet demand - a practice that means gas power plants often set the price and which Spain has said means prices do not fairly reflect a growing share of renewable generation.