Czech Business Today

The energy crisis has a knock-on effect on the economy, driving up prices for businesses and reducing the amount of money that consumers have to spend. The price of gas is pushing up energy prices which are driving extremely high inflation. For many businesses the situation is financially unsustainable and has even more drastic consequences than the COVID-19 pandemic. Businesses therefore support the Commission’s approach of taking short-term measures to ensure affordable prices and reducing costs for European citizens and businesses, including direct financial support for vulnerable consumers, as well as for those SMEs and energy-intensive industries suffering the most. We also favour measures that would decouple the gas price from the electricity prices and those that would address market abuse and speculation. Temporary price caps or other interventions in the wholesale energy markets are necessary in the currently over-strained market. At the same time, these extraordinary measures must be set up at a level which will still give the desired price signals yet won’t destabilise the security of supply.

It is clear that the primary cause of this situation is Putin´s weapon against Europe – European dependence on Russian gas. That is why Europeans suffer from high energy prices. In turn, we need to eliminate the root cause of rising electricity prices, facilitate increased production and the use of non-fossil energy to the extent that meets the energy demand. The Commission’s proposal to reduce demand is the easiest way to cope with energy bills and to lower emissions. However, further savings might be a big challenge for some industries. We therefore suport that savings must be a joint effort by households, the public sector and businesses. Beyond short-term measures, greater investment is needed for a more rapid transition to a non-fossil and climate-neutral energy system. Indeed, it should be recognized that many measures, particularly major investments, take longer to become a reality. For some measures, more time is needed to enable their proper planning and to ensure their feasibility and compatibility with the basic energy objectives and to avoid short-term measures that may turn out to be counterproductive in the longer term. The need for long-term thinking also applies to ensuring the security of energy supplies and preparedness for exceptional situations and disruptions in the markets. Considering the future energy landscape and generation mix, new emerging technologies, geopolitical developments as well as the lessons learnt from the current crisis, these adjustments and improvements should contribute to optimising the functioning of the electricity market design and make it a better fit for driving a cost-effective decarbonisation of the electricity sector, delivering affordable prices for consumers and increasing its ability to withstand price volatility.

Alena Mastantuono, rapporteur on energy markets opinion, EESC Member – Employers´ Group