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Energy crisis: Ireland among 11 countries that opposed plan for EU countries to jointly buy gas

Ireland, Germany, Austria and Denmark are among those that opposed an energy proposal submitted by France and Spain.

An ail and gas processing plant.
An ail and gas processing plant.
Image: Alamy Stock Photo

EU ENERGY MINISTERS are holding an emergency meeting today on how to tackle surging gas prices, with 11 countries including Ireland and Germany rejecting proposals from France and Spain for deep market reforms.

The ministers recognised the price hikes “jeopardised the integrity of the European energy market,” the chair of the meeting, Slovenian infrastructure minister Jernej Vrtovec, told a press conference.

But they agreed “we should not rush into rash decisions,” EU energy commissioner Kadri Simson said.

The gathering in Luxembourg was bookended between an EU summit last week called on the same issue and the COP26 climate summit next week in Glasgow. 

It came against a backdrop of rocketing energy prices globally as many countries’ economies jump into high gear after a long hiatus forced by Covid-19 restrictions.

Europe, highly dependent on imported gas and oil, is seeing wholesale energy prices jump dramatically, mainly on the back of soaring spot gas prices that are the benchmark.

The two proposals

The European Commission has come up with a “toolbox” of measures to mitigate the short-term surge, mainly encouraging member states to cut taxes and levies that typically account for around a third of energy bills. This was widely endorsed at today’s meeting.

But Spain went into the meeting gung-ho to persuade the others to back its plan for EU countries to jointly purchase gas, the same way they did for the bloc’s successful Covid-19 vaccines procurement.

France, backing Spain, wants a redesign of Europe’s energy market to make gas a less important component in setting prices – something that suits its domestic energy mix, which is more than 70% supplied from nuclear power.

Nine countries including Ireland, Austria, Denmark, Finland, Germany and the Netherlands said in a joint statement issued just before today’s meeting that they opposed fundamental changes to the EU’s market.

“The internal market for gas and electricity has been jointly and gradually built over the past decades. Competitive markets contribute to innovation, security of supply and are thus a key element to facilitate the transition” towards the EU’s ambition for a low-carbon future, they said.

EU energy commissioner Simson said there was “broad consensus” that the current price hike was temporary and “caused by the extraordinary global gas demand – not our market design”.

“There is no denying that the current market situation puts Europe under pressure,” she said, but the focus needed to stay on the EU’s ambitions to become carbon neutral by 2050, which meant more investment in renewable sources.

“Changing the current model poses risks to market predictability, competitiveness and our clean energy transition,” Simson said.

Nevertheless, the ministers were open to Spain’s proposal for joint procurement of gas, “as an idea among others” being explored, she said.

Allies

One of the signatories to the statement, Luxembourg, said Sweden and Belgium had also signed onto the statement, bringing the total backing it to 11.

“The Spanish government is over-promising by saying joint energy procurement will solve the crisis. What will solve the crisis is efficiency investments,” Luxembourg Energy Minister Claude Turmes told reporters as he arrived for the meeting.

Spain’s energy minister, Sara Aagesen Munoz, countered that the energy price surge “is an extraordinary and urgent situation that requires urgent action”.

“Our proposal is totally clear and forceful,” she said, adding that she planned to win over her counterparts “with facts”.

“The energy transition, the ecological transition and the decarbonisation that Europe is committed to is only possible if consumers and industries perceive the benefits of this transition,” she said.

Irish wind

The meeting comes after Ireland’s Climate Change Advisory Council sent its first proposed carbon budget to Minister for Transport and Climate Eamon Ryan.

The budget is trying to create a map for Ireland to follow to meet the government’s target of cutting emissions in more than half by 2030 – a stepping stone on the way to its second key target of net-zero emissions by 2050.

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The first proposed carbon budget, which will last until 2025, allows for a total of 295 million tonnes (Mt) of CO2 emissions between now and then.

Speaking RTÉ’s Today with Claire Byrne, Ryan said that Ireland embracing renewable power such as wind energy will help combat fuel costs in the long run as well as helping Ireland achieving its carbon targets.

“We’re at risk from high fossil fuel prices. We can’t control what goes on in Russia or Saudi Arabia or Asia, but we can tap into our own wind power, particularly offshore wind,” he said.

So by doing that, we think we can achieve a very significant reduction. It’s more competitive, it’s a no brainer for us to make this leap and make this change.

The safety of Ireland’s winter energy supply had been dependant on the the reopening of two gas-fired stations that were temporarily closed, the Bord Gáis-owned Whitegate in Cork and Energia-owned Huntstown in Dublin.

Speaking today, Ryan said that one of the plants has “come back repaired and the second is due back in the next week or two.”

© – AFP 2021 with reporting by Rónán Duffy

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