They will, according to Spain’s Energy Minister Teresa Ribera, mean that “consumers across the EU will be able to benefit from much more stable prices of energy, less dependency on the price of fossil fuels and better protection from future crises”.
But will it be enough to save Europe’s struggling industrial metals production sector?
The brutal reality is that half of the region’s primary aluminum and zinc capacity and almost a third of its silicon capacity is currently offline due to high power prices.
The immediate impact comes with potential future impact as well.
Producers are reluctant to invest in the new metals capacity needed to achieve Europe’s self-sufficiency goals because they can’t model power prices over the time-frame to build a new mine or smelter.
“We need bold action to get out of a dead-end street,” was the stark warning from Bernard Respaut, head of the European Copper Institute (ECI), speaking at a debate on Europe’s power crisis jointly hosted with industry association Eurometaux.
European power prices have fallen a long way from their 2022 peaks, when the region was still reeling from the reduction in Russian gas supplies.
However, they are by no means back to levels trading before Russia’s invasion of Ukraine, and that isn’t going to change any time soon.
Wholesale pricing will continue to be determined on a pay-as-clear model, where bidding goes from the cheapest to the most expensive source, which tends to be gas.