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By G. Uth – 27. Octubre 2021 – 

At last, the EU provides tools to fight the soaring electricity prices…

or did they? 

The soaring electricity prices are not an isolated problem in Spain. It’s a worldwide problem! However, Europe has been hit the hardest, and Spain is one of the worst affected countries within Europe. 

Therefore, the Spanish Government – with prime minister Pedro Sanchez positioning himself as the man to save Spain from this situation – over the last three or four months, with loud voice and large gestures – promised to the Spanish people that he will ensure that the electricity bills in December this year will be on par with electricity bills in December 2018. 

Earlier, in another article, we have touched on the ignorance needed to make such promises and during the time both Sanchez and his Sanchitos have had to learn that it’s not that easy for the Spanish Government to tame the global energy prices. Strong forces are at work. 

So, a resolute Sanchez announced that things would then be sorted out with the colleagues in the EU. He would go to Brussels and demand some EU-tools so he could better manage the electricity prices. 

So off he went, with his loyal followers and their blank books, to note down all the new EU measures given to them.   

And back they came, too. With “el Canut” full of tools – without any real value. 

After all, what can the European Union actually do against a global energy problem, without really taking its hands out of its pockets? 

We know now that some of the main reasons for the high prices in Europe are largely due to the high gas prices, the high CO2 prices, the high taxes and charges on the same and not least the algorithm that prices are calculated according to, on most of Europe’s electricity exchanges. 

Most European countries have already adopted fiscal tools to keep the prices in control, just like Spain, reducing taxes and duties. But, as we calculated in an earlier article, those savings have already been overtaken by the soaring energy prices. 

So, it was with some excitement and anticipation, we waited to see what the EU could come up with, to bring prices back to normal. A tool box was announced! 

So, what was actually in the tool box? 

First of all, there seems to have been an extra effort to help the most vulnerable families, and below you can find the most important things in the tool box, all within the limits of what the EU legislation “allows”: 

  1. Temporarily reduce taxes and duties on energy. 
  2. It would be legal to grant direct subsidies to small businesses under EU law.  
  3. Better access for small businesses to long-term electricity contracts. 
  4. It would be legal to offer the most vulnerable clients longer time to pay their electricity bills.
  5. Secure the supply for the vulnerable, so that they are suddenly without power. 
  6. Make the electricity market more transparent and liquid. 
  7. Examine possible “dirty” competition in the market, in particular the coal market. 
  8. Support easier access to green energy sources.

Well, as you probably have noticed: absolutely nothing new of any significance has been brought to the table.  

In addition to the eight points, there is the usual nonsense with lots of declarations of intentions to grow the green energy market, and a whole bunch of other totally inconsequential potential policy measures that will never lower electricity prices in the next 5 years. 

Paragraph two, in particular – given the thought, that since the beginning of the Covid era, the anti-business Spanish Government has made no effort whatsoever, to help the small businesses, and in contrary of more modern countries, not given one single subsidy to one single company in order to better cope with the electricity bill, or for that matter, helping them to able to manage the daily costs – is not likely happen either. 

And the wet dream of the most left-leaning Sanchitos, nationalizing the energy market, has (thankfully) probably endless prospects as well. All other things being equal, this would also lead to even higher taxes. 

One of the main reasons why little more than an inept brainstorming and a cozy chat was really done at the EU meeting, is probably because most energy ministers agree that prices are going down at the end of the winter anyway, so why bother? And it’s most probably not going to happen again in their reign. Even less reason to bother! 

So, the conclusion is that we just have to calm down and carry on, spend all our money on electricity and then hope the politicians are right and that Putin gets in a better mood and finally opens up the gas taps before winter – otherwise a really expensive winter is planned for those heating with gas. The power doesn’t get any cheaper either. 

I really hope that Sanchez and his Sanchitos have had a splendid journey and some really, really good food to eat and excellent wine to drink, because then at least someone has benefited from their trip to Brussels. 

However, as a small final ray of light, it does seem that prices are stabilizing. We haven’t seen large fluctuations for a while, either in the day-ahead price or the future prices. So, we might avoid further choking moments when we download the electricity bills to come. Just maybe… 

 

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