Greece asks EU for urgent response to soaring power prices, letter shows

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By Angeliki Koutantou and Kate Abnett

ATHENS/BRUSSELS (Reuters) – Greece’s prime minister has asked the EU to urgently respond to soaring power prices in central and eastern Europe, which Athens said are being exacerbated by Russian attacks on Ukraine’s energy infrastructure.

In a letter to the European Commission, seen by Reuters, Kyriakos Mitsotakis asked Brussels to create a bloc-wide regulator with powers to inspect energy markets across the EU, and urged the Commission to support cross-border infrastructure projects to transfer power between countries.

Power prices in Greece more than doubled from 60 euros per megawatt hour in April to 130eur/MWh in August, the letter said.

“We cannot explain convincingly to our citizens why the price they pay is rising so suddenly. This is politically unacceptable,” the letter said.

Mitsotakis blamed the price spike, which has also affected countries including Romania and Bulgaria, on factors including soaring temperatures this summer, power infrastructure outages, and hydropower reservoirs dried out by climate change-fuelled drought.

But he said an additional burden has come via Ukraine, which has become increasingly reliant on power imported from other European countries. Russian attacks have knocked out half of the country’s power generating capacity this year, Ukrainian officials have said.

The EU agreed an upgrade of its power market rules last year to try to encourage more fixed-price contracts with power generators and protect consumers from volatile energy markets.

But the price of power in Europe – even in countries which have rapidly increased local renewable energy production – is still often pegged to gas-fuelled power plants, which can expose prices to sharp fluctuations in fuel markets.

Gaps in interconnector capacity between countries and congestion in local electricity grids can also push up prices.

“The new Commission should take up the task of pushing through more cross-border capacity,” Mitsotakis said.

The EU will need to invest 584 billion euros in upgrading its power grids this decade, by the bloc’s own estimates, to overhaul decades-old infrastructure and ensure grids can carry larger shares of renewable energy. 

The letter was first reported by the Financial Times.