No more fossil fuels, renewables first: but at what cost? Is the energy transition profitable after the pandemic and the war in Ukraine? The protests in Europe alarmed governments, who understood that action had to be taken. At a minimum, reduce energy prices, reports rador with reference to Euronews.it.

Government of Italy: ecological transition

In recent months, electricity prices in the European Union have risen significantly, to such an extent that it became necessary to reform the way they are set. Currently, the EU wholesale “electricity market” is a marginal pricing system.

This means that all electricity producers receive the same price for the energy they sell at a given time.

Hard times: Germany returns to coal and nuclear power! The price of electricity varies greatly depending on the energy source used to produce it: renewable energy sources are the cheapest, of course, while fossil fuels are much more expensive. And pollutants. Doomed to be forgotten soon.

With some exceptions: Germany, considering the difficult times, decided to return to coal… And not only: Chancellor Olaf Scholz (64) said: “Perhaps it would make sense to postpone the shutdown of nuclear energy.”

How does the power supply work?

National electricity producers present their offers on the market, with the offer containing both the cheapest source of energy and the most expensive, with the cheapest being purchased first until demand is satisfied. But the approximate price is the price of the last manufacturer. According to supporters, this European system is the fairest and, in the long run, the most convenient for consumers.

Vulnerability and price fluctuations Considering that fossil fuels (from oil products to coal and natural gas) accounted for almost 70% of the European Union’s energy balance in 2020 and that most of them are imported from third countries, this means that Europe of 27 countries continues to be very vulnerable to fluctuations in electricity prices.

The recovery of the global economy after the lockdown caused by Covid, which led to increased demand for energy worldwide, and after Russia’s war in Ukraine, which forced Moscow to limit the flow of gas to Europe in response to sanctions, has led to a sharp increase in fossil fuel prices.

Rising inflation and electricity bills have led to protests in all major European countries, with some leaders now calling for the price of electricity to be “unbundled” from the price of gas to ease the burden on households and even more on businesses. This will be only the first step. Much remains to be done for the future ecological transition.