The Days of Energy Deregulation Are Over in Europe – The New York Times

by | Sep 8, 2022 | Energy

After decades of promoting a free-market approach to the electricity and natural gas industries, European governments are taking back control of these vital functions. Record-high energy prices, partly the result of Russia’s throttling of gas supplies, are prompting lawmakers to discard economic orthodoxy and undo years of painstaking deregulation.Britain, perhaps the most market-oriented of the large European countries, is taking one of the biggest steps in this direction. Prime Minister Liz Truss, on her third day in office on Thursday, announced a plan to, in effect, freeze energy bills for two years for consumers and six months for business.The intervention, with an estimated cost to the government of as much as 150 billion pounds ($172 billion), would prevent household energy bills from rising about 80 percent next month, potentially slowing the country’s double-digit inflation rate. In recent years, Britain has had a regulated price cap on energy for households, but there is growing political consensus that it is not up to dealing with the extremes of current markets, where prices for natural gas and electricity have reached several times their norms.At the same time, the European Union has proposed a cap on Russian gas prices and negotiations with Norway, another large, but friendly, gas supplier. Because natural gas-fired power plants usually set electric power prices, Brussels wants to impose a tax on generators from non-gas sources, like wind and nuclear, whose operating costs are lower, and use that revenue …

Article Attribution | Read More at Article Source

Share This