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The EU Commission wants to contain particularly severe price swings in European wholesale through a price cap. Energy Minister Leonore Gewessler said ahead of a special meeting with her EU counterparts that the security of supply argument must be taken seriously.

Energy Minister Leonore Gewessler (Greens) expressed reservations about the EU Commission’s proposal for a European wholesale gas price cap. “I think it’s important not to leave any stone unturned in lowering petrol prices,” Gewessler said ahead of a special meeting with his EU counterparts in Brussels on Thursday. But at the same time, the security of supply argument must be taken seriously. Gewessler expects “intense” debates on this proposal.

The EU Commission wants to contain particularly severe price swings in European wholesale through a price cap. This affects some transactions at the TTF wholesale hub, to which many EU supply contracts are linked. Specifically, the cap would be applied automatically if the price of gas to be delivered in the following month exceeded 275 euros per megawatt hour (MWh) for two weeks and at the same time was at least 58 euros higher than the reference price for liquefied natural gas (LNG). ) on the world market.

Different locations across Europe

While countries such as Germany or the Netherlands expressed similar skepticism as Austria, the maximum price is not sufficient for many other EU countries such as Italy, France, Malta, Belgium and Poland. “For us, this is a joke after so many weeks of discussions and proposals,” said Polish Environment Minister Anna Moskwa.

“We are certainly in very different positions in Europe in this crisis,” said Gewessler. As a landlocked country, Austria does not have the opportunity to install LNG terminals on the coast, but relies on pipelines. The different supply structures “obviously make the management of this crisis more challenging”, said the Minister of Energy.

German State Secretary Sven Giegold said: “To sum up, everyone is somehow dissatisfied with the Commission’s proposal.” For Germany, it is “important that the markets do not mix, but that we fight the causes of high prices”, said Giegold. This is due to dependence on Russian gas, gas shortages and high consumption.

Habeck rejects criticism of German attitude

Meanwhile, German Economy Minister Robert Habeck has rejected criticism of the German position on the European gas price cap. “We don’t block,” the green politician told “Handelsblatt” on Thursday. EU states have agreed on a flexible and smart cap for excessive pricing times. “But I’m skeptical when it comes to a fixed price cap in the market because it would be too high or too low.”

Luxembourg minister Claude Turmes, on the other hand, urged calm: “Let’s keep calm,” he said. “We have a month to get this cow off the ice,” Turmes said, ahead of the next meeting of energy ministers in December.

Gewessler stressed that on Thursday in Brussels there would be no decision on the “market correction mechanism” mentioned by the EU Commission. However, ministers are expected to reach agreement on the less contentious issues of joint gas purchasing and accelerated approval processes for renewable energy. Gewessler is pushing for “concrete resolutions” here, saying “headed nails” must be made. The outcome of the meeting is still unclear in view of the dispute over the gas price ceiling.

“Iberian model” is not commonplace

However, the “Iberian model” long claimed by Austria is not on the agenda today. However, the EU must not lose sight of the decoupling of electricity and gas prices, the model “will also help us in the long term”, says Gewessler.

In a broadcast, the Labor Chamber criticized the lack of the “Iberian model”. The price cap is a “placebo correction mechanism. It would not have made a difference at any point during the crisis. Prices in recent months would not have been affected at all,” said AK energy expert Josef Thoman.

Experts argue that the mechanism would not have been triggered in August if it already existed, since the price cap was not violated for two weeks. On August 26th, the price of gas on the TTF reached its all-time high of EUR 340 per megawatt-hour, and is now around EUR 130.

(APA)

EU Trade Gas Price Cap: Gewessler Expects “intense… – S Chronicles

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