Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Hazloc Heaters
Vista Projects
Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy
Vista Projects


EU gas cap seen in place for one year, countries at odds over price level


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium
European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, September 28, 2022. REUTERS/Yves Herman

BRUSSELS, Nov 22 (Reuters) – The European Commission proposed introducing a gas price cap for one year from Jan.1, 2023, according to draft legislation seen by Reuters that has so far left the actual ceiling level blank.

The idea to cap prices has divided EU countries for many months. The Commission’s latest proposal will be debated by energy ministers from the bloc’s 27 member countries on Thursday.

An EU official said the Commission would propose a price higher than backers of the cap want.

One diplomat from that camp said the majority group expected the limit at around 150-180 euros per megawatt hour (MWh) for the cap to be activated several times in a year.

“Otherwise, we’ll have a cap on paper that will in practice never kick in,” said the diplomat, who spoke under condition of anonymity.

GLJ
All Business Marketing - Teledyne FLIR

The Commission’s draft law – which needs to be approved by EU countries to take effect – says the market correction mechanism was to prevent any repeat of price spikes seen last August when month-ahead TTF prices approached 314 euros/MWh on Aug. 26 and stayed above 225 euros/MWh for two weeks in a row.

All Business Marketing - Teledyne FLIR
GLJ

The ministers on Thursday will debate the formula of the cap, the exact ceiling level, as well as the size of the gap between the Title Transfer Facility (TTF) – the Netherlands-based gas exchange that serves as Europe’s benchmark for pipeline gas – and global LNG prices.

The sceptics raised a number of concerns including around ensuring a cap would not lead to increased gas consumption, legal risks to existing long-term contracts and pushing more trade to the over-the-counter (OTC) market and third countries, among others, according to diplomatic sources.

Divided as ever, EU countries are unlikely to agree on these crucial details of a cap this week, said the sources.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE