Greece has declared the risk of a sharp rise in electricity prices due to the strikes of the Russian Federation on Ukraine
Russian attacks on Ukrainian energy infrastructure have become one of the key reasons for the sharp rise in electricity prices in Southeastern Europe. Over the summer, electricity prices in the region more than doubled, underscoring the vulnerability of the European Union’s energy markets. This was announced by the Prime Minister of Greece Kyriakos Mitsotakis, informs Financial Times.
In a letter to the European Commission, obtained by the Financial Times, Mitsotakis said that in August electricity prices jumped from 60 to 130 euros per megawatt-hour. He called on the head of the European Commission, Ursula von der Leyen, to urgently intervene to solve the problem of the lack of cross-border energy capacities, which could stabilize prices.
Among the main reasons for the jump in electricity prices, the prime minister cited extremely hot weather, problems with energy production, and dried-up water reservoirs. However, he emphasized that the most important factor was the Russian strikes on Ukraine’s energy system, which led to a sixfold increase in electricity imports from EU countries to Ukraine.
Mitsotakis also emphasized the need to improve supervision of the electricity market, which, he said, functions as an “opaque black box.” Some European politicians, including former Italian prime minister and European Central Bank president Mario Draghi, have also expressed concern about high and volatile energy prices hurting Europe’s competitiveness.
The head of the European Commission, Ursula von der Leyen, emphasized the importance of the development of cross-border energy networks that can receive funding from the EU budget to achieve climate goals.
Tariffs in Ukraine
In Ukraine, during the war, there is a moratorium on increasing tariffs for gas, heating and hot water, but it does not apply to electricity and cold water. At the same time, according to the Memorandum with the IMF, the Ukrainian authorities allow a gradual increase in utility tariffs for the population as soon as it becomes possible.
The National Bank of Ukraine predicts that gas, heating and hot water tariffs will remain unchanged in 2024, but the difficult situation in energy and the state budget may lead to a gradual increase in tariffs in the coming years.
