EU countries still split by ‘different views’ on gas price cap

The primary-ever EU cap on gasoline costs nonetheless has an extended solution to go.

The 27 international locations are break up by “completely different views” across the unprecedented proposal which goals to set a most worth on the day by day transactions happening within the gasoline market.

The cap will apply to the Dutch Title Switch Facility (TTF), Europe’s main buying and selling hub, and different related venues, and can act as an emergency ceiling to forestall circumstances of utmost hypothesis and volatility.

The precise worth vary is but to be outlined.

“Right here, as you possibly can think about, now we have reasonably completely different views on the [TTF] mechanism,” mentioned Czech Vitality Minister Jozef Síkela mentioned on Tuesday on the finish of a gathering of power ministers in Luxembourg.

“The primary query is how you can be sure that capping will nonetheless permit us to purchase the gasoline we want in the marketplace,” Síkela mentioned, whose nation at present holds the rotating presidency of the EU Council.

Kadri Simson, European Commissioner for power, mentioned the TTF restrict may very well be used “instantly” as soon as international locations endorse the proposal, which continues to be within the works.

“As we develop this short-term software, we should guarantee safety of provide and keep away from a rise in gasoline consumption,” Simson advised reporters.

The worth cap is a part of a new package deal of extraordinary measures to deal with the power disaster, which additionally options joint purchases of gasoline provides and computerized solidarity guidelines to deal with shortages.

The package deal was mentioned by EU leaders throughout a summit in Brussels final week after which despatched again to power ministers to debate the technical particulars.

Síkela mentioned ministers “extensively supported” the thought of joint procurement and “welcomed” the solidarity guidelines however they raised questions and expressed considerations relating to the worth cap.

“Now we have to introduce measures that can please, if attainable, all member states,” he mentioned.

As officers gathered in Luxembourg, Europe’s gasoline costs continued to lower, buying and selling fell under €100 per megawatt-hour for the primary time since mid-June.

Requested if this downward development may dampen the momentum across the gasoline cap, Síkela mentioned “the sport is just not over” as there may be nonetheless uncertainty over the upcoming winter season.

“As a result of the sport is just not over we have to have an emergency measure, no matter the place we’re within the [price] curve,” the Czech minister mentioned, referring to the TTF mechanism.

A unprecedented assembly will probably be convened on 24 November with the goal of approving the brand new package deal.

Iberian extension underneath query

One other level of rivalry in the course of the ministerial assembly was the chance of extending the so-called Iberian mannequin to your entire European Union.

The mannequin, launched this 12 months by Spain and Portugal, is a state assist programme that partially covers the excessive worth of gasoline used to provide electrical energy.

The subsidy is given to gas-fired energy vegetation and compensates for the distinction between the true market worth and the capped worth. This ends in decrease payments for shoppers and corporations.

The European Fee believes making use of this technique to the entire EU would result in €13 billion in internet advantages however warns of great hurdles and “political challenges” to make it occur.

Underneath the subsidy, gasoline demand may improve between 5 and 9 billion cubic metres (bcm), the Fee mentioned in its newest non-paper.

Low-cost electrical energy may leak exterior the EU and enter the UK and Switzerland, two international locations deeply interconnected with their neighbours.

As a state assist programme, the Iberian exception is poised to ivolve excessive prices for international locations that rely very closely on gas-fired energy vegetation, corresponding to Germany, the Netherlands and Italy.

Japanese, Nordic and Baltic international locations may also take pleasure in fewer advantages from the measure, given their disparate power mixes. In the meantime, France could be the “largest internet beneficiary,” the chief estimated.

Moreover, an EU-wide subsidy programme would require the creation of a brand new system to redistribute prices among the many international locations in accordance with the advantages it gives.

“It is as much as member states if they are going to discover a answer, particularly on how you can tackle flows to 3rd international locations or how you can agree on the cost-sharing rules,” Commissioner Simson mentioned, in response to a query from Euronews.

Nonetheless, given the myriad of obstacles introduced within the non-paper, it is nonetheless unclear when the chief will be capable of desk a legislative proposal.

The textual content, if ever unveiled, is anticipated to be topic to intense and extended negotiations among the many 27 states.

Within the non-paper, the Fee gives an alternate avenue: a brand new sort of long-term contract that will apply solely to renewables and nuclear vegetation in an effort to forestall the contagion impact from gasoline costs.

These so-called “contracts for distinction” are already getting used within the UK to deal with the power disaster.