Surging gas and electricity costs are forcing European governments to discuss billions of euros in aid for households and stricken suppliers, as concern mounts over a deepening winter energy crisis.
EU energy ministers will meet this week to discuss national responses to a surge in wholesale gas prices, amid concern that they will jeopardize Europe’s post-pandemic economic recovery and undermine Brussels’ plans for ambitious but costly green reforms.
Italy is expected this week to unveil a multibillion-euro support package for households. A source at the Italian finance ministry with direct knowledge said “a plausible amount to tackle the issue [of soaring energy costs] could reach up to €4-5bn”.
Rome has already spent €1bn on intervening directly in the energy market to cut consumer prices. Italy covers more than two-thirds of its energy needs with imports.
Italy’s plans follow Spain’s decision last week to raid what it says are energy companies’ excess profits and provide tax breaks to consumers. Companies are expected to mount a legal challenge to the move, which has driven down share prices.
France has already announced a €100 subsidy for almost 6m low-income households. The UK’s government is also considering providing energy companies with emergency state-backed loans to take on unprofitable customers from failing smaller suppliers and has admitted that several companies could go bust in days.
Equinor, the Norwegian state-controlled oil major, said on Monday that it would increase its gas supply to Europe by boosting production from two North Sea fields from Friday. Equinor said it was looking at further ways to boost exports.
“We believe that this is very timely as Europe is facing an unusually tight market for natural gas,” said Helge Haugane, head of gas and power at
Equinor. Norway is the biggest natural gas supplier of the EU behind Russia.
Spain’s government also called on Monday for the EU to centralize natural gas purchases to counteract vendors’ market power and build up strategic reserves.