EU introduces electricity reforms to lessen threat of price spike seen after Russia invaded Ukraine

The EU unveiled plansto make electricity bills "less dependent" on fossil fuel costs to reduce the likelihood of price hikes similar to those seen when Russia invaded Ukraine.

Since the conflict in Moscow last year pushed prices skyrocketing for both corporations and everyday users, Brussels has been striving to modernise its electrical grid.

In Europe, the cost of the most expensive energy sources—typically gas-powered plants, which are adaptable enough to meet spikes in demand—is used to determine wholesale energy prices.

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Gas prices rose tremendously after Russian President Vladimir Putin sent in his troops, taking EU electricity costs with them and leaving governments strugglingto compensate consumers.

"For over two decades the electricity market design has served European companies and consumers, letting them enjoy the benefits of a single market," said European energy commissioner Kadri Simson.

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"However, the crisis spurred by Russia's attack on Ukraine exposed a number of shortcomings in the current system which needed to be addressed."

Several nations, such as France and Spain, have demanded a complete overhauling of the system and a complete decoupling of the price of electricity from the price of gas.

Nonetheless, the proposals made by the EU's executive branch, the specifics of which must now be worked out between the European Parliament and member states, fall short of those requirements.

By promoting long-term contracts for renewable energy, they seek to bring downthe impact of variable fossil fuel pricing as opposed to making a complete transition.

The measures would provide citizens additional rights to negotiate long-term fixed-price contracts with their energy provider, reducing their susceptibility to the sudden price increase.

(With inputs from agencies)

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