EU: Twenty-Seven still disagree on gas price cap mechanism

by Gabriela Baczynska and Benoit Van Overstraeten

BRUSSELS (Reuters) – European Union countries again clashed on Thursday over plans to cap gas prices at 275 euros per megawatt hour (MWh), questioning its effectiveness and impact on supplies and policies of “energy sobriety”.

EU energy ministers met in Brussels in an extraordinary council to examine the European Commission’s proposals to deal with the energy crisis on the continent.

This point of disagreement blocks the adoption of other proposals, such as the joint purchase of gas and the acceleration of authorization procedures for renewable energy projects.

According to diplomats, the Twenty-Seven agreed on the principle of these two measures, but postponed their formal approval to another meeting, scheduled for December 13, the countries in favor of a ceiling demanding a green light for the three propositions or nothing.

Brussels on Tuesday proposed a temporary gas price correction mechanism aimed at preventing a price spike comparable to that seen last summer, but states are divided over its terms.

Polish Climate Minister Anna Moskwa said on Thursday that the European Commission’s plan was “a joke”.

“The text that is on the table is unsatisfactory (…) it does not say clearly whether it will have an effect on prices,” said Belgian Energy Minister Tinne Van der Straeten.

Their Greek counterpart said a cap of 150-200 euros/MWh would be “realistic”.

“It could help us reduce gas prices and therefore reduce electricity prices, which is a major challenge in Europe this winter,” said Konstantinos Skrekas.

For the Maltese Minister of Energy, Miriam Dalli, the strict conditions necessary for the implementation of such a mechanism make it “virtually impossible”.

Fifteen EU member countries want to cap gas prices to contain energy costs following Russia’s cuts in deliveries to Europe in response to sanctions over its invasion of Ukraine .

But Germany, the EU’s biggest economy, the Netherlands, Sweden, Austria and Finland argue that a cap could shift supply elsewhere and reduce incentives to reduce gas consumption.

“The proposal is flawed. (…) There are many risks of harming the security of energy supply, and also the stability of the financial markets,” said Dutch Minister Rob Jetten.

(With contributions by Marek Strzelecki, written by Gabriela Baczynska, French version Diana Mandiá, edited by Sophie Louet)

Source link -87