The sensible bet is to accelerate the energy transition

(EurActiv, 14 Feb 2022) The energy price shock currently gripping Europe is settling in for the long term and needs to be addressed with market reforms to avoid high gas prices pushing up the cost of electricity, writes Teresa Ribera.

Teresa Ribera is Minister for the Ecological Transition of Spain.

After the biggest health crisis in a century and its serious social and economic consequences, we are experiencing turmoil associated with a strong recovery and the consequent increase in demand for raw materials.

In the eye of the storm is gas, which has experienced a significant price increase due to, on the one hand, increased demand in Asian countries, particularly in China, and, on the other, growing tension with Russia.

The increase in the price of natural gas is in itself a major economic problem. In addition, there has also been an unprecedented rise in the price of electricity. This increase is not attributable either to the energy transition or renewable energies. Still, it is a direct consequence of the effect of the price of gas on the electricity market, which is intrinsically linked to the market’s regulatory design.

For months, the response has been based on three premises that today appear to be wrong. Initially, it was emphasised that we were facing a temporary problem. However, the current situation has lasted longer than expected and is likely to continue for some time yet, given the strong demand and the geopolitical context.

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EurActiv, 14 Feb 2022: The sensible bet is to accelerate the energy transition