possibility of set an upper limit on the price gas importedas requested by 15 European partners, including Spain, last week, starts to get in the way European Union. Two days before the informal summit of European leaders in Prague this Friday, Community Executive President Ursula von der Leyen confirmed her intention to work with Member States in this direction. reduce gas prices, limit volatility and impact Russia’s price increase and an upper limit on the price of gas used to generate electricity. During a discussion on the situation in Ukraine ahead of the plenary session of the European Parliament, “We already presented this option in March and said it could give an important signal that the EU will not pay any price for gas.” said.
Von der Leyen outlined the roadmap he will propose to European heads of state and government in the Czech capital this Friday. Until now, the idea of imposing a general cap on all gas entering the European Union, not just from Russia, but which Brussels had been insisting on for months, had failed due to the abolition of both countries such as Germany and the Netherlands. or the European Commission understands that can cause supply problems. An argument that is still very valid and keeps Brussels on the bet of capping Russian gas and continuing negotiations. most beneficial agreements with main partners suppliers such as Norway, the United States or Algeria.
However, in a very vague speech he gave this Wednesday, Von der Leyen General ceiling with “immediate effect on price levels” it also “has drawbacks for the security of gas supply”. What has changed for the Germans to take a 180º turn in the position the Commission has defended from March to the present? “The situation has improved a lot since then. There are more Member States willing to do this and we are better prepared”, explained the President of the Commission, although he did not elaborate on how the cap might work, “it must be appropriately designed to ensure it”. Supply security”.
Dutch TTF Reform
According to the president, the ceiling should only be a “interim solution,” while Twenty-Seven reforms price comparison The Dutch TTF will replace gas, “which no longer represents our market because it contains more LNG (liquefied natural gas),” with a “new EU price index that guarantees better functioning of the market”. This is one of the elements in the working document the Commission tabled at its extraordinary meeting of energy ministers last Friday, and a request from Spain and other European partners.
Von der Leyen, in addition to a general upper limit for all gas, control gas prices with two solutions: dialogue and negotiation Better prices with “trusted partners” like Norway and a cap on the price of gas used to generate electricity, ie a kind of “Iberian mechanism” at the European level, are imposed. According to the Germans, their initial proposal is a ceiling that would be the first step in electricity market reform expected in the first quarter of 2023. Voting that exceptional times require exceptional emergency measures, which the Union must act jointly and unitedly as ever (European Parliament).
Von der Leyen, for example, has argued that since the Russian invasion of Ukraine, the European Union has reduce their addiction fossil fuels Russians and equipping itself with key tools to reduce imports from that country. A year ago, 27 countries imported 40% of Russia’s gas, now they only get 7.5% via pipeline. A discount offset by more liquefied gas imports from “trusted partners” such as Norway or the United States. In addition, the president reminded that the EU now has important tools such as the obligation to replenish 90% gas reserves (15% more than a year ago), a common purchasing platform and an agreement to redistribute unexpected profits. to support vulnerable consumers from energy companies.