With member states stepping up pressure for action, European Commission President Ursula von der Leyen said Brussels was working on “emergency intervention” as well as structural reforms to the electricity market – which could allow cheaper renewables for the setting electricity prices. “Currently, natural gas dominates the electricity market price. . . with these exorbitant prices, we will have to disengage,” von der Leyen said on Monday in Berlin. “We should ensure that renewable energy is produced at a lower cost, that these costs are passed on to consumers and that windfalls are used to help vulnerable households.” He added: “We need an emergency instrument that will be activated very quickly, perhaps in weeks.” As the crisis threatens to push Europe into recession, Ben van Beurden, chief executive of Shell, has warned that the region may have to look after energy access for several years. “We may well have several winters where we have to somehow find solutions through efficiency savings, through deltization and a very, very rapid build-out of alternatives,” he said. “That this is going to be somehow easy or it’s going to end, I think that’s a fantasy that we have to put aside.” We may well have several winters where we have to somehow find solutions through efficiency savings, through rationing and very, very quickly creating alternatives. That this is going to be somehow easy or over with, I think is a fantasy that we have to put aside He added that the crisis would test “solidarity” among EU member states as governments were forced to decide how to preserve major industries. In the wake of Russia’s invasion of Ukraine, Europe’s benchmark electricity price has risen to 10 times its decade average, in line with a 14-fold rise in the cost of natural gas, with shortages feared to increase this winter. Rising prices have weighed on utilities, even as oil and gas companies enjoy record profits. Uniper, one of Germany’s biggest utilities, said on Monday it had requested a 4 billion euro increase to an existing 9 billion euro credit line from German state bank KfW to help secure its short-term liquidity. The Dusseldorf-based company, historically Europe’s biggest buyer of Russian gas, is among the bloc’s biggest power producers with 34 gigawatts. Wien Energie, Austria’s biggest energy company, said wholesale gas and electricity prices were rising so fast that it was struggling to finance its operations, adding that it was now in talks with the government. Germany, the Czech Republic and Spain are stepping up the bloc’s efforts to reform the energy market, cutting the link between electricity and soaring gas prices. Czech Industry Minister Jozef Sikela said he expects timely draft proposals for an emergency EU energy council next week. “We need to separate electricity prices from gas prices,” he said, also suggesting that the EU could cap the price of natural gas used to generate electricity. German Economy Minister Robert Habeck has in recent days joined the push for a “fundamental reform” to unlink the two markets, as have leaders such as Italy’s Mario Draghi and Spain’s Pedro Sánchez, who have called on Brussels to limit electricity prices. Even Austria, which has traditionally pursued a fiscally conservative agenda in Brussels, sided with the interventionists. Chancellor Karl Neuhammer said he would press fellow EU leaders to impose a price cap as soon as possible. “[Russian president Vladimir Putin] should not be allowed to decide the European electricity price every day,” Nehammer said on Monday, warning that immediate action was needed to “save the European economy”. The cost of wholesale electricity reflects the price of the last unit of energy purchased through auctions held in Member States. In practice, this currently reflects the price of natural gas, not renewable energy or nuclear.

Brussels has been wary of destroying the current market pricing system, given that it provides the basis for future investment in renewables and other electricity infrastructure. However, von der Leyen hinted in June that the commission would have to review the system. The Co-operation of Energy Regulators has warned against fundamental reforms to the way the electricity market works, but in April said a “temporary relief valve” could automatically cap prices when electricity prices suddenly rise sharply. Additional reporting by Sam Jones in Vienna and Philip Stafford and Tom Wilson in London