Blog Post

Energy Crisis prompts France and Spain to urge EU wide rule changes

Richard Simmonds • Oct 05, 2021

The staggering surge in wholesale gas prices is not just impacting the UK but the whole of Europe and beyond. The crisis has got so bad that both France and Spain have called on the EU to introduce sweeping changes to rules on how the bloc's energy market functions.

It’s a global issue

We’ve all seen some people in the media claim that the current crisis in the energy supply market is down to Brexit. This is clearly false as the European Union struggles to get to grips with the issue and European energy suppliers come under huge pressure.

The crisis has prompted ministers from France and Spain to call for changes to the rules governing the EU’s energy markets as electricity and gas prices soar. Europeans are seeing their already high energy bills rise further and analysts are warning that the blocs economy will suffer as a consequence.

Germany has been particularly hit hard due to its reliance on coal power stations. With the price of carbon and coal both soaring due to massive demand from Asia the nation’s economy is under pressure.

The situation has gotten so bad that European governments are seeking ways to try and reduce the impact of price spikes for their citizens.

“The gas price has massively and brutally increased over the last weeks. It is clearly a matter of huge concern for all of us. It is unfair. It is inefficient and it is very costly. It is time to have a look at the European energy market,” said French Finance Minister Bruno Le Maire.

Spain has been one of the hardest hit by the price surge and has called for a European wide response to take decisive and urgent action to address the issue.

Also read: Wholesale gas prices hit another record high adding to energy market concerns

What’s causing the crisis?

The causes of Europe’s energy crisis are similar to the UK’s. Tight supplies of natural gas used to generate electricity, high demand for gas and coal from Asia and China in particular and higher costs for carbon permits as part of the EU’s scheme to tackle climate change.

Some analysts have blamed the push towards green energy as a major contributory factor when it comes to record-high energy costs. Despite this EU politicians are persisting with their green policies and adamant that going 100% renewable will see prices fall.

According to the European Trade Union Confederation, there are currently across Europe there 3 million households that cannot afford to heat their homes with 15% of the blocs working poor are lacking the money needed to turn on their heating. With winter rapidly approaching the governments of Europe will be hoping it’s a warm one.

Also read: What has caused the Energy Market Crisis and what does it mean for the energy retail market?