Electricity prices break through historical extremes, the EU is preparing to intervene in the electricity market urgently

EU energy ministers will hold a special meeting on September 9 to discuss the rapid rise in gas and electricity prices, Czech Industry and Trade Minister Josef Hikula, which holds the rotating EU presidency, said on Monday.

Gas prices per megawatt-hour surged to 310 euros per megawatt hour, up from around 18 euros in July last year, Chikura said. In addition to the reduction of natural gas caused by the conflict between Russia and Ukraine, the drought in southern Europe and the shutdown of nearly half of the nuclear power plants in France due to technical maintenance have all caused difficulties in the power market.

An unprecedented surge in energy costs is fueling inflation, threatening the finances of European households and businesses. As the energy crisis continues to intensify, the benchmark electricity futures contract delivered in Germany next year exceeds 1,000 euros per megawatt-hour (equivalent to 1 euro per kilowatt-hour) for the first time, and the baseload electricity price in France in the next year soars to 1,200 euros.

German Finance Minister Lindner told Bild Sunday that the government must address the issue of soaring electricity prices "with utmost urgency", otherwise "the electricity crisis will continue to push up inflation". The electricity market should be overhauled so that prices are no longer tied to rising gas prices.

"Europe made a big mistake on energy and was too naive about Russia's [potential actions]." Hikura proposed capping the price of natural gas used for power generation or intervening in the market, "the main goal is to get the energy market back on track." Normal, bring prices down to levels that European industry can afford.”

European Commission President von der Leyen said on Monday that the bloc is planning emergency measures to bring down soaring electricity prices. Von der Leyen said: "For a variety of reasons, skyrocketing electricity prices have exposed the limitations of our current electricity market design. It was developed in a completely different context and for a completely different purpose. That's why we are now making an emergency intervention and structural reforms to the electricity market.”

Czech President Milos Zeman criticized last week that the most important cause of Europe's current energy crisis is "green fanaticism" rather than the Russian-Ukrainian conflict. Zeman made the remarks to the Czech ambassador at a conference in Prague. He said Germany intends to close the last three remaining nuclear power plants, "not to mention coal-fired power plants. But cutting energy supply with constant demand would lead to higher electricity prices and higher prices for energy and bulk raw materials."