Higher energy prices ‘inevitable’, says Piebalgs

Speaking exclusively to EurActiv, Energy Commissioner Andris Piebalgs says that new energy and climate-change proposals should lead to higher prices for consumers. But paying 5% more now will avoid much steeper price hikes in the future, he argues.

“Then, what is the common incentive to invest inside the Union? It is the carbon price. I could favour some technologies, such as renewables, but it will never work on a broad scale if carbon does not have a price.”
However, Piebalgs is adamant that Brussels has not given up on its plans for a common European energy policy along the way. “The objective for me was always to base energy policy on climate-change objectives,” he says, arguing that further greenhouse-gas cuts were “envisaged at all times”.

But he also warns that the Commission’s proposals for a new energy “industrial revolution” will be painful for governments and consumers if these objectives are to be met.

“What we have calculated is a 5% increase in prices,” Piebalgs said.

Asked whether this would not run into opposition from citizens who worry about rising energy prices, Piebalgs retorts that future price hikes are “inevitable”.

“If we do not pay this 5% now, we will pay later 20 or 50% more because of the oil prices going up. It is quite clear that given the current rate of consumption and reserves, it cannot be that in five years time we will have oil prices at $60 per barrel, forget about it! For gas prices, it is the same.”

EurActiv