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ENERGY

EU chief calls Spain-France gas connections ‘critical’

EU commission chief Ursula von der Leyen called Friday for resuming work on a new gas pipeline linking Spain and France, calling it a critical element to reduce dependence upon Russian energy.

European Commission President Ursula von der Leyen
European Commission President Ursula von der Leyen delivers a speech at the Cercle d'Economia 2022 annual meeting in Barcelona, on May 6, 2022. Photo: Pau Barrena/AFP

“Now all of Europe agrees that we must cut our dependency on Russian fossil fuels,” Von der Leyen said during an appearance in Barcelona alongside Spanish Prime Minister Pedro Sanchez.

Last week, Russia cut off gas supplies to Poland and Bulgaria as the Kremlin reacted to tightening EU sanctions over the invasion of Ukraine.

“It is crucial for our climate goals and to end the Kremlin’s blackmail,” she added.

Von der Leyen pointed to the recently agreed plan by the bloc’s 27 member states called REPowerEU that aims to reinforce energy independence and reduce dependence on Russian gas.

Under that plan “we will privilege cross-border projects, for example the critical connection between Portugal, Spain and France,” she said.

Spain currently has six liquefied natural gas (LNG) terminals that could help the EU boost imports, but the problem is there are currently only two, low-capacity, links to France’s gas network, which has connections to countries
further east.

A project called Midcat to link Portugal, Spain and France was launched in 2013, but it drew opposition from environmental groups and work was halted in 2019 when financing fell through.

Von der Leyen said the project has geopolitical importance and needs to be resumed now so “together we can set ourselves free from Russian threats”.

The Spanish government is also favourable about resurrecting the pipeline project. However, it doesn’t want to contribute to the estimated 440 million euros in financing needed as the project doesn’t directly benefit Spain.

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ENERGY

Gas bills to rise by over 11% in France in July

For households that use gas for heating, cooking or hot water, bills will go up again in July as regulators increase tariffs.

Gas bills to rise by over 11% in France in July

Starting on July 1st, gas bills will increase for the 10.5 million households in France which either heat with gas or use it for cooking and hot water.

France’s energy regulatory commission (Commission de régulation de l’énergie, or CRE) announced on Monday that the estimated increase for the benchmark price in June to July would be 11.7 percent. 

The price increase is related general market trends, but it also has to do with French consumption of gas dropping.

“We are witnessing the gradual exit from fossil fuels, with some consumers switching to electricity. In the meantime, those who remain on gas are fewer in number, but they must bear the costs,” Jacques Percebois, an economist with a speciality in energy, told Ouest France.

In France, the price one pays for gas includes the cost per kilowatt of consumption, taxes and the cost of delivery, with the base rate set by the regulator.

How much will my bills increase by?

The average household in France consumes 1,123kWh of gas per month, giving them a current monthly bill of around €124.

With the price increase, this bill will go up by about €14.80, with a little over half of that owing to the cost of distribution and about a third due to the increase in prices on wholesale markets, according to Ouest France’s calculations.

For those only using gas for cooking and hot water, the average monthly bill would go up from €20 to €23.30 a year.

Ultimately, the exact amount your bill will go up by will depend on your supplier, although companies tend to have broadly similar tariffs. 

Will the cost keep going up?

Experts expect the benchmark price to increase again by approximately 10 percent in August. However, it is also worth noting that expected prices dropped between February and June, according to MoneyVox.

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