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A significant increase in EU electricity exports to Ukraine in the wake of Russian strikes on its grid has caused a surge in prices in Southeastern Europe, Greece’s Prime Minister has warned.
In a letter to European Commission President Ursula von der Leyen cited by the Financial Times, Kyriakos Mitsotakis said that the price for electricity last month had reached 130 euro per MWh, which was up from 60 euro per MWh. One reason for the surge was the fact that EU electricity exports to the Ukraine went up almost sixfold this year. Before the war, the Ukraine was a net exporter of electricity.
“We feel like there is a mini energy crisis that no one is talking about,” Mitsotakis wrote, adding a call for better oversight of the European electricity market by the Commission, since it was currently “an incomprehensible black box — even to experts”.
Among the other factors that contributed to much higher electricity prices in Southeast Europe was low rainfall, which emptied dams, summer heat, and power generation outages, the FT wrote in its report on the Greek Premier’s letter.
“There is a fundamental distortion in the energy market of south-eastern Europe,” Mitsotakis wrote. “Something isn’t working right. I don’t expect immediate solutions, but at least let someone deal with it.”
Mitsotakis is not alone in his calls on the Commission to do something to rein in electricity prices. Earlier this week, former ECB president Mario Draghi, tasked by the Commission to prepare a report on the bloc’s economy, warned that high electricity prices were affecting the competitiveness of European businesses.
In his report, Draghi suggested that the price of wind and solar electricity is decoupled from the price of gas, to take advantage of the cheaper energy. “Energy prices have also become more volatile, increasing the price of hedging and adding uncertainty to investment decisions,” Draghi said in his report.
