EU states bidding against each other for gas driving up prices, says commission vice-president

European Union member states drove up energy prices by bidding against each other for gas contracts, amid “nervousness” in Germany while it strove to fill its depleted gas storage, European Commission vice-president Frans Timmermans has said.

The chief of the EU’s green transition spoke to the media as the commission unveiled proposals for common purchases of gas, taking inspiration from joint vaccine buying at the height of the Covid-19 pandemic.

“One of the reasons why our prices are higher in Europe than in Asia, for instance, is because member states have been competing against each other,” Mr Timmermans said.

“There was a lot of a lot of nervousness in certain countries, and Germany is one of them, until the storage levels were at 90 per cent,” he said.

Student accommodation: A market plagued by bed shortages, rising rents and 51-week leases

---

An attempt to buy the next election with a giveaway budget would be a gross miscalculation

---

The outlook for interest rate cuts is changing - so should Irish borrowers be worried?

---

IDA gives Intel €30m in aid package

---

But the idea of “doing this jointly has been embraced” now in Berlin, he continued. The commission has also laid out plans to share gas between EU member states, in case one is targeted for gas cuts by Russia.

“For instance, if Slovakia is cut off, Slovakia will get this amount of gas, from that storage, through these pipelines, so that nobody is in the cold,” Mr Timmermans explained.

“There is no need to have blackouts if we do all this together. The only way we’re going to have blackouts is if member states resort to being selfish.”

Mr Timmermans lashed out at the Hungarian government, led by Viktor Orbán, after its foreign minister Péter Szijjártó travelled to Moscow and held talks with Gazprom in recent days, following a similar trip in July.

“With the exception of one member state, all member states understand that Putin has turned gas into a weapon against the European Union. Everybody understands this with the exception of Mr Orbán,” Mr Timmermans said of the Hungarian prime minister.

“I don’t think going on your knees in front of Putin in Moscow is going to be a long-term solution for our problems, frankly, and I was quite disgusted by seeing minister Szijjarto again going to Moscow, begging for mercy from someone who has invaded a peaceful European country, and is trying to bring autocracy to the rest of Europe.

“You should be clear of who your friends are and who your enemies are. And I think there’s no time in Europe to pussyfoot around with Mr Putin, who is a clear threat to our security and to our future,” he continued.

The public should understand that the energy crisis is not likely to be resolved in the immediate term and that there will be two to three difficult winters ahead, Mr Timmermans said.

“This is going to take about three years until we really have enough houses insulated, enough heat pumps installed, enough solar panels installed, enough wind capacity,” he said.

[ EU proposes joint purchases of gas across member states ]

Next winter will be even more challenging, he predicted, because the EU will not be able to refill its storage facilities from Russian gas.

“This winter will be tough, but you know, the storage is okay so we’ll probably get through it if we don’t have a Siberian winter,” he said.

“Next winter will be a lot more difficult, because then Russian gas will be a very, very small part if at all of our gas storage,” he continued. “My assumption is that also the third winter ... will still be challenging, I think we need to prepare our societies for this reality.”

In order for the EU to transition to secure and renewable energy sources in the next three years, “billions” rather than millions of euro in investment will be required, he said.

Mr Timmermans stressed that money must be targeted to invest in the energy transition, and “not spent in consumptive expenditures” as this would prolong the crisis.

“The only way we’re going to get the energy prices long-term sustainably affordable is by speeding up our energy transition by reducing our energy consumption of fossil fuels,” Mr Timmermans said.

“There’s always a risk that the immediate crisis drives out all your long-term projects. And that, in this case, would be a tragedy, if we would throw all the money at just today and then forget that there’s also a tomorrow, and that we also have children and grandchildren who want to live on a liveable planet.”