According to Ursula von der Leyen, the President of the European Commission, the block is facing an extraordinary situation in the energy market. She noted that Europe was still largely dependent on Russian crude supplies. Therefore, President von der Leyen called for emergency intervention in the electricity market in order to curb mounting inflation amid soaring gas prices. Today, the EU's wholesale electricity market works on the basis of marginal pricing which is why the final price of electricity is often set by the price of gas. So, this system needs to be changed. Von der Leyen did not unveil further details. Analysts believe that the main purpose of such measures is to make power prices less correlated to gas prices. This can be reached by limiting LNG costs or leaving out gas when calculating the final price. The majority of EU countries have filled 80% of their gas storage capacity, while Germany’s gas storage facilities are nearly 83% full. Yet, experts caution against premature optimism, saying that full gas storage in Germany and other countries may help lower LNG prices but are not good for the economy in the long run.
