In addition to the upper limit of 180 euros per megawatt hour, according to EU diplomats, the gas price must be above the international average price for liquefied natural gas (LNG), as Maltese Energy Minister Miriam Dalli said on the sidelines of the meeting in Brussels. With such a measure, the EU energy ministers want to jointly combat the high electricity and gas prices resulting from the Ukraine war.
Most recently, the gas price on the TTF trading platform was 110 euros per megawatt hour on Monday. In August, the price on the TTF reached a high of over 340 euros per megawatt hour – but only for a short time, mainly because the gas storage facilities in the EU were well filled. Experts believe it is possible that after a hard winter it will rise again to over 200 euros when the states have to fill their stores in spring. The project basically affects large customers who trade on the TTF – consumer prices are indirectly influenced by wholesale prices.
The EU’s agreement on a gas price cap means an end to market manipulation by Russia and Gazprom, Poland’s prime minister said on Monday. “At the most recent meetings in Brussels, our majority coalition managed to break the resistance – especially from Germany,” wrote Polish Prime Minister Mateusz Morawiecki on the short message service Twitter. “This means the end of market manipulation by Russia and its company Gazprom.”
Concerns about security of supply
The Czech EU Council Presidency had already expected the agreement. “I see no reason why we shouldn’t come to an agreement today,” said Czech Energy Minister Jozef Sikela at the start of the meeting with his counterparts in Brussels. “There will be nothing that will stop us.”
He pointed out that the heads of state and government had also demanded an agreement on Thursday. With regard to Germany, Sikela had again emphasized that states could also be overruled if necessary. Because the fronts in the dispute had previously hardened: while 15 countries, including Greece and Italy, advocated a strict upper limit, Austria, Germany and the Netherlands, among others, were worried about security of supply.
The fear remained until the very end that liquefied natural gas could no longer come to Europe if there was a cap. In the event of a shortage, struggles over distribution would break out among the states, which would put the EU to a crucial test. However, Germany voted in favor of a gas price cap on Monday despite concerns about the policy’s impact on Europe’s ability to attract gas supplies in price-competitive global markets, three EU officials told Archyde.com. Austria abstained.
Gewessler criticizes expansion to other gas exchanges
“I am convinced that it can help prevent absurd excesses in gas prices in the future. At the same time, however, an extension to other gas exchanges in addition to the TTF was included in the regulation at the last minute,” explained Energy Minister Leonore Gewessler (Greens) in a statement after the decision.
This expansion could also have an impact on the security of supply, which applies to Austria in particular. “Even if we are taking big steps away from our dependency on Russia, we still need these deliveries at the moment.”
FPÖ leader Herbert Kickl criticized the gas price cap. The EU is implementing a “prosperity destruction program” and the government is watching.
Habeck refers to security measures
The German Economics Minister Robert Habeck (Greens) justified his approval with various security measures that are planned. “We have now defined a large number of instruments that significantly reduce the risk of a thoughtless effect,” said Habeck on the sidelines of the special meeting of the EU ministers responsible for energy in Brussels. If gas then goes back, if rationing has to be done or if trade goes down, the mechanism will be suspended again.
Moscow: Unacceptable interference
According to a media report, the government in Moscow describes the European Union’s planned gas price brake as unacceptable. The Interfax news agency quoted Presidential Office spokesman Dmitri Peskov as saying that this was an attack on market pricing.