by Europe intensifies its readiness for a hiatus from importing energy inventory from Russia on Wednesday. It suggested the introduction of maximum prices on power. Also, it asked for a reduction in electricity supply and reduced fuel import from Russia.
Content Of The EU Proposal
Ursula Von Der Leyen addressed the issue of energy crises two days ago before meeting with EU ministers of energy. In his address, he stated that Europe would adopt coping mechanisms to scale the period. The European Commission President listed five steps to take in the proposal.
However, this proposal requires the authorization of other EU associates before it can take a stand. Some of the strategies he outlined are as follows.
Firstly, there will be a schedule for when to supply and withdraw power. Directives on power usage must be complied with at designated hours. That is, power must go out whenever it is required to, and vice versa.
Secondly, there will be maximum revenue on generators using non fossiliferous fuel. The strategy adopted here is to repel hydropower firms from realizing exorbitant profits from renewable generators. And this is because of their power to take the price of natural gas in the wholesale market.
Thirdly, there would be an imposition of fines on business ventures in the business of natural gas that violate sanctions. Ursula called it a windfall tax or solidarity contribution. It will charge companies that realize excess profits this fee.
Fourthly, the EU will kick back on state help regulations for the short-term. This procedure will financially aid parties in the Bloc energy market. The buying capacity of some of these participants went to nothing after getting hit by hefty collateral on borrowing.
And lastly, there would be a limit on importing fossil fuel products from Russia.
Von de Leyer declared that the motive behind these measures is explicit. And that is crumbling Russia’s financial pillars used in the war against Ukraine.
Reasons Behind The Harsh Measures
Furthermore, Ursula mentioned that this strategy would strengthen the erupted war on energy between Russia and Europe after Russia invaded Ukraine months ago.
Moreover, the EU had initially forced Russia to halt fossil fuel transactions with Germany. Despite knowing this would hold off gas supplies from Russia to Europe. Also, this would result in Europe riding out the incoming winter without natural gas.
Vladimir Putin responded to the proposal by hiking the wager on Russia’s economy. He said at a meeting in Vladivostok that he would not deliver gas products to any jurisdiction under Europe if they attempted to enforce maximum fuel prices.
Russia sold 40% of its gas and 30% of its oil before the war. Now, Europe imports only 9% of Russia’s products via the pipeline in Yamal.
The Bloc has managed to stock its warehouse ahead of the inbound winter period. Gas infrastructure data revealed that Europe is currently 82% loaded above what the union expected.
