Divisions deep among EU energy ministers ahead of emergency meeting

LUXEMBOURG, Oct 26 Reuters - Divisions deepened among the European Union countries ahead of an emergency meeting of ministers on Tuesday on the bloc's response to a spike in energy prices, with some countries seeking a regulatory overhaul and others firmly opposed.

European gas prices have hit record highs in the autumn and remain at lofty levels, prompting most EU countries to respond with emergency measures like price caps and subsidies to help trim consumer energy bills.

However, countries are struggling to agree on a longer-term plan to cushion against fossil fuel price swings, which Spain, France, the Czech Republic and Greece say warrant a bigger shake-up of the way EU energy markets work.

Those countries will make the case on Tuesday for proposals that include decoupling European electricity and gas prices, joint gas buying among countries and, in the case of a few countries including Poland, delaying planned climate change policies.

Our proposal today is that options contracts for purchases can be activated in a centralised manner by the European Union, this could be done in situations when security of supply is at risk, Sara Aagesen's secretary of state for energy said.

In an indication of differences likely to emerge at the meeting, nine countries including Germany - Europe's biggest economy and market for electricity - on Monday said they would not support EU electricity market reforms.

This will not be a remedy to mitigate the current rising energy prices linked to fossil fuels markets, the nine countries said in a joint statement.

The European Commission has asked regulators to analyse the design of the European electricity market, but said there was no evidence that a different market structure would have fared better during the recent price jump.

Kadri Simson, the EU's energy policy chief, said she hoped to receive a clear message from ministers on what medium-term measures the EU should take to respond.

We have to start acting right now, despite the fact that the results of those actions will be seen in years to come, Simson said.

Other proposals - such as countries forming joint gas reserves - have also been met with resistance from some countries.

I think that the Luxembourg energy minister is over-promising by saying joint gas procurement will solve the crisis, Spanish energy minister Claude Turmes said.

Hungarian prime minister Viktor Orban has dismissed such plans as utopian fantasy a stance at odds with other EU countries who say the price jump should trigger a faster switch to low-emission, locally produced renewable energy to help reduce exposure to imported fossil fuel prices.