Europe Searches For Solutions As Gas Crisis Persists

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A surge in gas prices has hit consumers and energy firms in the UK, with knock-on effects for the food industry and supplies of carbon dioxide.

Elsewhere in Europe, consumers are also facing a steep rise in energy bills, and governments are scrambling to help. The crisis has highlighted the difficulty for Europeans in funding the move to renewable energy. Here, five correspondents explain how different countries are responding.

Consumers’ bills have spiralled here in recent months, with the cost of electricity increasing 35% over the last year and nearly 8% in August alone.

Energy prices in Spain are closely tied to the wholesale gas market, so the price per megawatt-hour for consumers has repeatedly hit new highs recently.

“I was paying about €40 (£34) per month and now I’m paying around €60,” said Amparo Vega, who has a newspaper kiosk in central Madrid.

Earlier this month, the coalition government of Socialist Prime Minister Pedro Sánchez unveiled a series of measures aimed at bringing bills back down.

They include tax cuts and a temporary reduction in extraordinary profits made by energy companies. The latter move has drawn criticism from the industry, although the government has clarified that renewable energy providers will be exempt.

The government says its aim is to reduce electricity bills by over 20% by the end of the year. As winter approaches, consumers such as Ms Vega hope that happens.

“The outlook isn’t very rosy,” says Michele Fiorita, taking some air outside his shop in central Rome.

“My energy bills have gone up by about 15% but I’ve heard they’ll rise by around 40% in the next few months.”

Italy is particularly exposed to gas price hikes: 40% of its energy comes from natural gas and around half of that is imported from Russia.

So lower Russian gas exports to Europe and an increase in the price of raw materials have hit hard.

The Italian government has already spent some €1.2bn to cut the increase in energy prices for households and this week pledged another €3bn to help further in the coming months.

Prime Minister Mario Draghi says for the next three months “system costs” will be eliminated from gas and electricity bills. They’re the tariffs added to bills to help fund the transition to renewable energy.

It’s a short-term sticking plaster to help reduce the jump in energy prices for struggling households but removes an important financial incentive to help the switch to renewables.

Fundamentally, Italy will need to diversify its energy sources, moving away from its dependence on gas and more towards green energy. “That’s surely the future,” says Michele, “it’s the only way to reduce costs in the long-term.”

As soaring energy costs present huge personal difficulties for families, they also pose some tricky politics for Brussels.

EU leaders have been busy pushing their sweeping climate plan to cut carbon emissions by 55% by 2030 – a drive known as “Fit for 55”.

It’s wide-ranging but includes proposals that, critics say, could lead to huge further price hikes.

Even backers of the measures quietly admit the transition to a greener economy inevitably, one way or another hits people in the pocket. On the current crisis, the European Commission says that price rises are a combination of several factors, particularly the global surge in demand.

Increases in the price of CO2 permits under the EU’s carbon pricing scheme are blamed for some of the rises, but the Commission says it’s only a “small percentage”. It wants to expand that scheme under “Fit for 55”.

But with calls from the Spanish government for the energy crisis to be on the table at the next EU leaders’ summit, Brussels is facing questions over what it can or will do to help.

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