EU energy prices will rise unless European governments stick to strict guidelines on when subsidies are justified, according to the European Commission.
Following intense political debate and a storm of protest over energy prices, the Commission, the EU executive, is revising rules to guide the European Union’s 28 member states.
Generous support schemes for solar energy, for instance, have been blamed for adding to the financial burdens of households and businesses at a time when economic recovery is tentative.
The commission says the subsidies should be phased out and, meanwhile, made more flexible.
Instead of feed-in tariffs, which are fixed-rate incentives, it favours a ‘feed-in premium’, which would rise or fall depending on market conditions.
“The ultimate aim of the market is to deliver secure and affordable energy for our citizens and business.
“Public intervention must support these objectives.
“It needs to be cost-efficient and be adapted to changing circumstances,” EU Energy Commissioner Guenther Oettinger said in a statement.
“If public interventions are not carefully designed, they can severely distort the functioning of the market and lead to higher energy prices,” the statement add- ed.