Newsnight: Eastern Europe grapples with Russia over gas
Last month, the European Commission authorized Spain and Portugal to temporarily cap the prices of natural gas and coal used by power plants. While the rest of the EU paid around €90 (£76.56) per megawatt hour, the two southern European countries would cap their price at €50 (£42.50). Spain and Portugal, despite having large amounts of renewable energy capacity, were paying high electricity prices because the EU energy market is heavily influenced by fossil fuels.
Currently, the Russian invasion of Ukraine is pushing the price of fossil fuels to record highs.
However, under this new system, two countries are expected to reduce their energy bills by 30-40%.
Speaking to Express.co.uk Rana Adib, Executive Director of REN21, a global community of renewable energy stakeholders highlighted ways in which European countries can end their dependence on fossil fuels, particularly those imported from Russia.
She said: “What governments need to do is massively build renewable energy generation capacity, invest in energy conservation and energy efficiency to bring down the cost of energy bills as quickly as possible. possible.
Energy crisis: Spain and Portugal drop from EU ranking and cut their bills by 40%
Russia’s invasion of Ukraine drove prices to record highs
“When you look at the example of Portugal and Spain, it’s very interesting.
“They have negotiated with the European Commission that they will essentially leave the European energy market mechanism for 12 months because the interconnection does not allow them to receive a lot of renewable electricity from the north.
“Building on this and its own renewable electricity capacity, the Spanish government expects to be able to reduce the cost of utility bills by 30-40%.
“The governments that are leading here really understand the opportunities around renewable energy and renewable electricity.”
After signing the agreement with the European Commission, Spain’s Energy Minister, Teresa Ribera, said: “It is important to have a tool that reduces our exposure to turbulence and volatility in the energy market. electricity and the price of gas at the moment”.
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The cost of renewable energy is steadily falling
Ms Adib noted that under the European mechanism, “the reality is that for a unit of energy that you buy, you will pay the highest price on the market”.
Since renewable energy generation is much cheaper than fossil fuels, she noted that Iberian countries “now have the opportunity to define their market mechanism where basically for fossil fuels they will pay a price, and for renewable electricity they will pay another price.
“It is more a reflection of cost generation.
“As a result, they expect the price to drop by 30 to 40%, and they are doing this by integrating into the energy markets and into their electricity prices, their cost of production.
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Britain is reeling from a massive energy crisis
Ms Adib also added that EU energy markets need to be reformed for other countries to follow suit.
She said: “The EU must strive to create clear policy and regulatory frameworks that reflect and truly deliver renewable energy to thrive, which is less expensive and resilient.
“It’s a political choice, and it’s clearly what needs to be done today.
“There are countries that do not make this political choice.
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Spain is rich in renewable energy
“They’re not doing it because there’s a lot of pressure from the fossil fuel industry, because the reality is today we’re seeing an increase in fossil fuel prices.”
It comes as the UK faces a massive energy crisis, industry regulator Ofgem announced earlier this week that many UK households will face energy bills of around £2,800 per year.
Jonathan Brearley, the chief executive of Ofgem, has warned that around 12 million Britons will face energy poverty as a result of this price hike, where energy bills are eating into a significant portion of their income.
Following the April increase to £1,971 a year, 6.5million people are in fuel poverty.