Increased EU electricity exports to Ukraine are disrupting the regional market

A significant increase in EU electricity exports to Ukraine following Russian strikes on its grid has caused prices to rise in south-east Europe, Greece’s prime minister has warned.

In a letter addressed to the President of the European Commission, Ursula von der Leyen quote by the Financial Times, Kyriakos Mitsotakis said the price of electricity last month reached 130 euros per MWh, up from 60 euros per MWh. One of the reasons for the increase was that EU electricity exports to Ukraine increased almost sixfold this year. Before the war, Ukraine was a net exporter of electricity.

“We feel that 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, as it is currently “an incomprehensible black box – even for experts”. .

Other factors contributing to higher electricity prices in southeastern Europe included low rainfall that emptied dams, summer heat and power outages, the FT wrote in its report on the Greek prime minister’s letter.

“There is a fundamental distortion in the Southeastern European energy market,” Mitsotakis wrote. “Something is wrong. I don’t expect immediate solutions, but at least let someone deal with it.”

Mitsotakis is not alone in calling on the Commission to do something to lower electricity prices. Earlier this week, former ECB President Mario Draghi, commissioned by the Commission to prepare a report on the bloc’s economy, ADVISED that high electricity prices were affecting the competitiveness of European businesses.

In his report, Draghi suggested that the price of wind and solar power be decoupled from the price of gas to take advantage of 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.

By Irina Slav for Oilprice.com

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