I would like to start by thanking you, Jernej, and your excellent team for steering the work of the Council for the past six months.

It has been a challenging time, but together, we have made significant strides forward in the clean energy transition. We have reacted swiftly to urgencies like the ongoing surge in energy prices, and we have made progress on key legislative files.

Today’s final Energy Council meeting under the Slovenian Presidency was a busy one.

As Jernej gave already a comprehensive overview of the discussions, I will focus on a few central topics.

First, energy prices are of course still on everyone’s mind. While gas prices have come down from the peak in October, they are still much higher than usual, a situation expected to continue until Spring. As a result, electricity prices also remain high, a concern for consumers across Europe.

Since we launched our Communication and toolbox on energy prices, 20 Member States have taken or announced measures to mitigate the impact on their people and businesses, in particular the most vulnerable.

It was reassuring to hear today that the steps the governments have taken have been rolled out swiftly and are already cushioning the impact of the unusually high prices. In our preliminary assessment, these measures amount to more than 3.4 billion euros.

I asked the ministers today to stay in close contact with the Commission on their actions, so that we all can have a comprehensive overview of the situation.

The Commission has not been idle either. In October, we promised to take a closer look at the functioning of the electricity market and tasked the Agency for the Cooperation of Energy Regulators (ACER) with delivering a preliminary analysis already by mid-November.

This they have duly done and I want to thank ACER and its director Christian Zinglersen for preparing a high-quality document at such a short notice. The preliminary report suggests that the current price model, where the cheapest energy sources are bought and used first, is the best option for EU households and businesses.

It also points out risks that alternative pricing mechanisms could pose to cost-efficient decarbonisation, cross-border exchanges and security of supply.

That said, the current electricity market situation is not perfect. The EU needs to increase grid flexibility, including storage, interconnectors, smart grids and demand response. Work on all these issues is ongoing.

Looking more closely at the current situation, the report shows that the gas price increase doesn’t affect all Member States the same. Those with less gas in their energy mix and/or better interconnections with other electricity markets are the most resistant to price spikes.

In the long-term, spot prices on the wholesale gas market have been cheaper than long-term contracts. It is important to note, of course, that this year has been an exception.  

The final assessment by ACER will be delivered in April 2022 and there are a couple of important issues that require an in-depth look.

First, our electricity market design has been very effective at incentivising the investment into renewables. How can we make sure that this remains the case as the share of renewables increases?

Second, ACER will look into how to better shield end-consumers, analysing customer protection and information, as well as the different contracts proposed to consumers. Flexible energy solutions and longer term hedging instruments will also be considered in this context.

I am very much looking forward to the results of this work.

In parallel with the report prepared by ACER, the European Securities and Markets Authority (ESMA) carried out an analysis of trading behaviour on the EU carbon market, in response to allegations of speculation.

While this report is also preliminary, it is reassuring. It finds that price volatility in the EU carbon market is comparable to that in oil and coal markets and lower than in gas markets.

The report identifies no specific cases of market manipulation, detected by national competent authorities, since emission allowances were brought under the financial markets regulatory framework from 2018. It is important to note that the ACER report did not find evidence of manipulation on EU energy markets.

ESMA’s final report will be delivered next year.

Meanwhile, we have been preparing the gas and hydrogen market package to be adopted on 14 December, which will also include the revision of the regulation of security of gas supply.

As gas will continue to play a role in the transition, we need a better functioning, more resilient gas market framework – a need also highlighted by the current situation.

One important focus of the package will be storage. Currently, the rules and practices in this area are fragmented and preparedness and risk anticipation are limited. We need a more strategic and coordinated approach.

We are also exploring how a joint purchases for emergency gas storage could increase resilience and contribute to price stability. And we should improve technical, legal and financial arrangements between Member States to ensure solidarity in case of a gas crisis.

While a well-functioning gas market is crucial, the only lasting solution to the fluctuating fossil fuel prices is to be less dependent on fossil fuels. So let me briefly touch upon the state of play regarding the renewable energy and energy efficiency directives, as well as the TEN-E regulation.

On the latter, I am very grateful to the Slovenian Presidency for their dedication to conclude the trilogues swiftly – hopefully still this year. At the same time, I want to reiterate the need to remain ambitious and keep the regulation in line with the Green Deal.

As you recall, the Commission has put forward a proposal that excludes gas and oil projects from the TEN-E framework. This is the first real test to the EU’s commitment to the green transition in the energy field and we must not fail it.

Under the Slovenian Presidency, the Member States also concluded the first round of discussions on the renewable energy directive and energy efficiency directive. While we all see the necessity to scale up renewable energy and improve energy efficiency, work remains to be done on how to achieve these goals.

Today, I had the opportunity to hear the views from the Member States, which was very useful for charting the way forward.

I now look forward to making progress on these files with the French presidency from January. I have just returned from Paris, where I discussed the French Presidency priorities on energy with the ministers of the ecological transition and housing. There is a lot of exciting work to do.

Thank you.