MorgenGespräche | The VERBUND-Energy Breakfast in December 2022

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MorgenGespräche | The VERBUND-Energy Breakfast on Dec 7th, 2022

Gas price cap, electricity price brake, merit order reform: How effective are the instruments in the crisis management toolbox?

HOST:

GUESTS:

MODERATION:

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Gas price cap, electricity price brake, merit order reform: How effective are the instruments in the crisis management toolbox?

Energy markets have been in turmoil since the start of the hostilities in Ukraine and are currently going through a worrying rollercoaster ride. If energy prices had already experienced a significant spike with the temporary abatement of the Covid crisis in the Western world starting in mid-2021 and the accompanying rapid economic recovery in demand that met with dried-up supply markets, they have really exploded with Russia's attack on Ukraine on Feb. 24, 2022. The very heavy dependence of some EU member states on Russian energy imports has led to panic reactions on the gas markets. The accompanying massive price increases have also filtered through to the electricity market through the so-called merit order system, in which gas-fired power plants often set prices for all generation units - with a corresponding impact on end customer prices. In order to prevent broad sections of the population in Europe from being affected on a large scale and to prevent a massive economic slump, the European Commission and the individual national states have proposed and in some cases also introduced various measures. I would like to discuss these proposed and already partially implemented instruments and their implications with my guests.