Publication date

December 15, 2022

“High bills” is an understatement, given all the unpayable energy bills every household, every small business, every company, and every local authority across Europe are facing.  There are however, a few exceptions: families living in passive houses, companies connected to an urban heating recovery system, businesses that generate their own electricity and benefit from self-consumption, local authorities whose municipal utility produces as much as it markets in renewable energy…

So it’s a big bill!

It is all the more astronomical because the energy comes from “extraterritorial” fossil sources, because needs have not been re-evaluated nor really reduced, and because the energy supply network is still largely centralised. We will be told that it is simplistic to question the European reforms to liberalise the gas and electricity markets. We will be told that they have contributed a lot, that without them there would be no production of renewable energy… That may be the case. This does not however mean that these policies are still appropriate. Today, these same rules do not allow markets to meet minimum societal objectives (security of supply, affordability, solidarity-based systems, zero fossil or fissile energy).

And yet, is it really that complicated?

As Eckart Würzner, Mayor of the German city of Heidelberg and President of Energy Cities explains, the municipal energy utility is partnering with cities in the province to invest in wind power and mass produce their electricity.  And to (re)gain control over production, to plan locally, to associate regionally.

We can learn several lessons from the energy price crisis in Europe and draw new golden rules for the continent:

  • Selling what you produce is a source of stability: how many energy marketing companies have gone bankrupt this year, caught between existing contracts and the volatility of market prices? Resulting in an unprecedented concentration of suppliers!
  • The diversity of local energy mixes calls for decentralised decision-making,
  • and prior to this, a detailed knowledge of the territorial opportunities and risks in terms of energy production and consumption.
  • Energy, like food and housing, are not commodities that can be commercialised without jeopardising democracy. No evidence has been seen to date of any benefit from such speculation in these markets. (Quality? Price? Positive externalities?)

Cosmetic adjustments or profound reforms?

So as we step into 2023, we must turn the page on European energy policies as conceived since the beginning of the sector’s liberalisation in the 1990s and 2000s. The previous reforms caused a real big bang, they reshaped everything.

To combat climate change, make the system resilient, ensure security of supply and access to energy in a radically changed world, we don’t just need a few cosmetic adjustments.

We need nothing short of another big bang!