Stay informed with free updates
Simply sign up to the EU energy myFT Digest — delivered directly to your inbox.
Greece has warned that Russian strikes on Ukrainian infrastructure contributed to electricity prices more than doubling this summer in south-east Europe, underlining the vulnerabilities of EU energy markets.
Kyriakos Mitsotakis, the Greek prime minister, has called on Brussels to urgently tackle a “prolonged crisis” of capacity that has driven prices to such extreme levels that it requires an urgent “political response”.
In a letter to European Commission seen by the Financial Times, Mitsotakis said that electricity prices had risen in August from €60 per megawatt hour to €130 per MWh. He called on Ursula von der Leyen to use her second five-year term as commission president to “take up the task of pushing through more cross-border capacity” to avoid such spikes in future.
Factors in the surge in prices in Greece, Hungary and Romania include hot weather, outages in electricity generation and low rainfall, which had left reservoirs feeding hydroelectric plants dry.
But Mitsotakis said a key driver had also been Russia’s attacks against Ukraine’s grid. Kyiv was previously a net exporter of electricity but this year has started importing significant amounts of power from its EU neighbours.
After heavy Russian bombardment in the first half of 2024, Ukraine increased electricity imports almost sixfold compared to 2023, according to ExPro Electricity data. “This is another cost that Russia’s devastating war is imposing on our economies,” the Greek leader wrote.
Mitsotakis also requested better oversight of the electricity market, which he called “an incomprehensible black box — even to experts”.
“We feel like there is a mini energy crisis that no one is talking about,” a Greek government official said, ahead of the letter being sent to Brussels on Friday.
Energy prices have become a key concern for policymakers, who are trying to piece together ways to improve Europe’s lagging global competitiveness.
The former Italian premier and European Central Bank president Mario Draghi noted in a major report this week that European companies faced electricity prices that were at least two to three times as much as their US competitors.
“Energy prices have also become more volatile, increasing the price of hedging and adding uncertainty to investment decisions,” Draghi said.
Von der Leyen said following the publication of Draghi’s report that “cross-border energy grids” were an example of “crucial … common European projects” that could potentially be funded from an enhanced EU budget.
The commission has previously estimated that €584bn of investment in electricity grids is needed up to 2030 if the bloc is to meet its ambitious climate goals. It has also set a target for EU member states to have electricity cables that allow 15 per cent of their electricity production to be available to neighbouring countries in the same timeframe.
Mitsotakis, who hails from the same centre-right European political family as von der Leyen, the EPP, also flagged the problem in a speech last week in Thessaloniki, during a press conference in which he underscored the region’s persistent issues with high electricity prices.
“There is a fundamental distortion in the energy market of south-eastern Europe,” Mitsotakis stated. “Something isn’t working right. I don’t expect immediate solutions, but at least let someone deal with it.”
