Gas storage tanks are fuller than ever (more than 92%), contacts with “trusted” suppliers are accelerating, and dependence on Russian gas has increased from 41% to 9% in pipeline imports and from 45% to 14% in the case of liquefied natural gas. e fell. gas. If, however, the Kremlin decides to cut off the supply, most EU May encounter a 100,000 million cubic meter pit this will make it difficult to replenish reserves next winter and will continue to put pressure on prices. To avoid this scenario, most European Commission presented numerous packages of measures this Tuesday. Gas price does not include the upper limit Requested by two weeks of EU countries, nor an extension of the “Iberian mechanism” separating the price of gas from electricity and for the time being itself a temporary “price correction mechanism” controlling speculation and excessive volatility, as well as promoting joint buying, solidarity and demand reduction.
Starting the call “Iberian mechanism” It allowed Brussels to collect experience and data on the impact on electricity price reduction in Spain and Portugal. In fact, the Chairman of the Commission, Ursula von der Leyenacknowledges that it is “worth” exploring the possibility of implementing it “on a European scale”, as suggested in the roadmap presented in Prague ten days ago, but acknowledges that there are still issues to be clarified and are still not included in the list of European vehicles for the time being. “We are still examining and are ready to discuss and explore the feasibility of implementation at European level, so the Commission’s position remains unchanged. However, we have a number of open questions that require further research and analysis”, conserving the resources of the Community Manager, who insisted. Fear that it will lead to increased demand or subsidize electricity from third countries. The risk that Germany or the Netherlands reject the idea.
The new plan will be reviewed by EU heads of state and government this Thursday and Friday at the European Council on 20 and 21 October. “We must necessarily intensify our three lines of action: reducing demand, ensuring security of supply, and controlling prices,” said Charles Michel, President of the European Council, in his letter of invitation to the leaders. This, according to the Belgian liberal, taking full advantage of the bargaining power of 27 through joint gas purchases, develop a new benchmark that more accurately reflects gas market conditions and examine a temporary dynamic price cap.
Three recommendations that add to the already approved austerity measures or the cap on the extraordinary benefits of energy are contained in the emergency battery designed by the Von der Leyen team, carefully taken by Spain. “Despite progress at an unprecedented pace for European parameters, we are still a long way from identifying solutions that could be sustainable over time,” said the third vice-president. Theresa Riverafeel that the offers are insufficient. And in the short term, more Brussels looks to next winter.
Joint purchases
As with vaccines against covid19, the European Commission common gas purchasing mechanism this will work from spring 2023. “The logical thing is that companies are merging to have more bargaining power rather than playing against each other,” argues von der Leyen. The plan includes: hiring a service provider Organizing demand gathering at EU level, grouping gas import needs and seeking offers in the market according to demand. Companies of the Member States would have to participate “by necessity”. In order to meet at least 15% of the relevant filling targets, although they can form a European procurement consortium.
The Community Manager understands that in this way, smaller EU countries and companies that are less favorable as buyers can access their gas volumes on better terms. Brussels should be informed before any gas purchase is concluded. or 5TWh (a little more than 500 million cubic meters) in volume and a memorandum of understanding in the event of a potentially adverse impact.
TTF revision and dynamic limit
The plan also includes another request from Member States: to develop an alternative price index for liquefied natural gas, an alternative to the Dutch TTF used as a reference in gas contracts in Europe. This is an index designed for pipeline gas, not LNG, according to Brussels, and artificially inflates prices because it does not reflect the reality of the current market. As this new index is being designed, for the next spring of 2023, Brussels proposes to launch an interim mechanism to fix prices through the TTF if necessary.
This tool will create a dynamic price cap for trades in TTF – figures are not yet final – and trading above the limit will not be allowed. Brussels argues that this way, excessive volatility and excessive prices will be prevented. The plan also provides a mechanism to limit surges in the energy derivatives markets and protect traders from large intraday price fluctuations.
40,000 million compliances
The plan also includes measures. compulsory solidarity This ensures that the Member States most affected by the energy crisis have the support of other European partners in an emergency. This obligation also covers Member States which, as in Spain, have liquefied natural gas storage facilities that are not pipelined to the rest of Europe but have storage terminals. The offer will also allow further reduce gas consumption and offers the possibility to redirect to Twenty-Seven 40,000 million from cohesion funds 2014-2020 period. These are hitherto unused funds that can be used in measures to mitigate the impact of the crisis on households and businesses. In the case of Spain, this means it can use around 4,000 million.