The European Commission (EC) said on Monday it had decided not to extend energy support measures introduced last year to counter the impact of higher prices after Russia’s invasion of Ukraine sent oil and gas prices soaring, and Agerpres.
These measures helped to calm the energy markets in Europe, the executive power of the Community said.
“The European Commission confirms that it will not propose an extension of these crisis measures,” including measures to reduce electricity demand, revenue caps for power plants and rules on retail pricing, Brussels said.
Electricity prices have now fallen to less than €80/MWh, while the price of gas has stabilised, so a rise in electricity prices in 2022 is considered “less likely next winter”, the EC said.
In addition, some aspects of energy price support measures are included in the EC’s long-term proposals for structural changes in the electricity market.
The proposals are designed to increase the use of fixed-price energy contracts, protect consumers from price increases and accelerate the transition to renewable energy, the European Commission said.
The price of gas in Europe continues to fall
Benchmark natural gas prices in Europe have continued to fall recently, hitting their lowest level in two years in late May, as weak regional economies weigh on the outlook for gas demand.
This situation does not seem likely to change in the near future after Germany, the “economic engine” of the European Union, entered a technical recession in the first quarter of 2023.
German gross domestic product fell 0.3 percent in the quarter after adjusting for price and calendar effects, according to data released on May 25.
The pullback in the German economy in the first three months followed a 0.5% drop in the fourth quarter of 2022. A recession is usually defined as two consecutive quarters of contraction. A preliminary estimate showed that GDP stagnated in the first quarter and that Germany had managed to avoid recession.
Demand for gas in Europe’s industrial sector is modest, despite the recent fall in prices, which has led to an oversupply in the market.
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Source: Hot News
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