After a year of energy crisis, the European Union is preparing to take far-reaching measures to control energy prices and secure supply on the continent. European Commission advocated urgent intervention in electricity market and they are also undertaking a structural reform, and the 27th Energy Ministers are called for an important meeting this Friday in search of a tough compromise for that path. Major energy companies are taking positions on diagnosis and recommendations for the reforms that lie ahead.
The three major Spanish power companies, Iberdrola, Endesa and Naturgy, agreed this Wednesday to demand gas price containment measures to avoid contagion in electricity markets, and to denounce speculative moves as one of the main reasons for prices to skyrocket. The time on the international gas markets is high.
“A step needs to be taken to rule out speculation in the gas market. Speculation must be eliminated,” he said. Francisco ReynesNaturgy Chairman of the Board, in his speech at the 7th El Economista Energy Forum. The manager clearly claimed The Title Transfer Facility (TTF), the Dutch gas market, is no longer used as a European benchmark. gas price due to the current deterioration in price.
“TTF is at record highs and it no longer has to do with the supply and demand relationship but with the physical constraints to dump more LNG. [el gas que llega por barco] It “conditions the wealth of families and the competitiveness of industry” due to the speculation caused by these restrictions and the overall impact on energy prices in Europe, as it is the reference index in Europe.
If an index is removed, another index must be found. Underlining this in the Dutch market, Reynés said, “We cannot leave a market index to enter a non-index or non-market place, the European Union must look for a new reference liquid market built on supply and demand.” It trades financial derivatives every year 100 times more than gas volume.
against gas volatility
“TTF is no longer representative, there is a lot of speculation internalized into the price. It has reached 300 euros per megawatt hour (MWh), it is absolutely unreasonable”, Endesa CEO criticized, Joseph Bogas, on the same days. “The main problem today is the price of gas and TTF being the reference index. Measures must be taken to limit the volatility of this gas,” he condemned.
In recent months, Iberdrola openly condemned the rise in gas prices as the source of the price crisis and called for measures to be taken in the gas market, not the electricity market. “We’ve already exhausted all the ‘drugs’ to contain the problem of the price of electricity for consumers, but we haven’t taken action against the source of the problem, the price of fossil fuels,” he said. Mario Ruiz Tag, CEO of Iberdrola Spain. “There is a brutal speculative environment on fossil fuels, which is the root of the problem: the high cost of electricity is a result of the high price of gas.”