Soaring gas prices spark renewed debate about European electricity

Industrial firms and countries like Italy are already calling for reform ahead of an EU summit on competitiveness on March 19

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A surge in natural gas prices since the Middle East war erupted has sparked renewed debate about Europe's electricity market, where prices are still linked to gas.

Industrial firms and countries like Italy are already calling for reform ahead of an EU summit on competitiveness on March 19.

The effective closure of the Strait of Hormuz as the United States and Israel pound Iran with air strikes and Tehran's retaliatory strikes on Gulf states have again highlighted Europe's dependence on imported energy.

European industry has long been crying out for lower electricity prices to help them meet competition from Asia and North America.

The impact of the war on fossil fuel prices “confirms the need to support the electrification of industrial processes even more,” the Uniden trade association which represents France's energy-intensive industrial companies said this week.

The European Union has sought to reduce dependence on imported oil and gas and should present a plan in May to speed up a shift to electricity.

France also aims to present a plan in the coming months to support electric cars, heat pumps and electric furnaces in industry.

The Middle East war “brutally reminds us of our vulnerability to the volatility of fossil fuel markets” and reinforce the need to speed up electrification of the economy, said France’s ecological transition minister Monique Barbut.