After the mandate of European leaders almost two weeks ago, European Commission practically prepared the last package of measures He said he would offer to lower gas prices (and, incidentally, the electricity bill) this Tuesday. The new package that the energy broker developed last Thursday, Kadri Simson will include a temporary mechanism to limit price volatility. joint gas purchases to use collective bargaining power and to prevent Member States from competing with each other and raising prices. Above all, the intention of Brussels, which continues to bet on negotiations with countries “trusted” manufacturers (Norway, Algeria…), Twenty-Seven jointly purchase at least 15% of the gas stored in the tanks.
“I think Member States can accept 15% of volumes. Announcing this Sunday on the microphones of the Belgian network RTL-TVi, justice commissioner Didier Reynders, minutes after the college of commissioners attended an extraordinary meeting via videoconference, which the Community Steering Committee will adopt this Tuesday and present to EU leaders during the European Council, scheduled for the weekend on 20 and 21 October. finalize the new proposal.
The Community Executive starts from the idea that joint gas purchase will allow Member States, as 27 of them did when purchasing vaccines against covid-19. use bulk purchasing power negotiating better conditions, reducing the risk of Member States competing with each other in the market and thus preventing prices from rising rapidly. He also thinks that transparency will help smaller countries, especially those that are more disadvantaged as buyers.
However, Brussels acknowledges that this measure will have no short-term impact and will only serve to coordinate demand when Member States start replenishing deposits in the spring – currently at 91%. The next winter of 2023 / 2024 and consecutively. According to Brussels, although Europe’s dependence on this country has decreased significantly over the past year, it is a winter that could be more complicated than the current one if Russia definitively cuts off the Russian gas tap.
Therefore, the need to take other measures limit pricesincluding a temporary mechanism to fix prices. A “dynamic” price limit and a limit to intraday price increases to avoid excessive volatility in the energy derivatives markets. As Simson progressed, the plan also Complementary index to the Dutch TTF, the criterion used to negotiate contracts in Europe to provide a “representative” criterion for imports of liquefied natural gas that is not “artificially” inflated or affected by Russian manipulation. This new reference index, which they propose to order from the Energy Regulators Cooperation Agency (ACER), was supposed to be ready for the start of the gas filling season in March 2023.
solidarity agreements
Among its proposals, the European Commission solidarity mechanism This ensures that the Member States most affected by the energy crisis have the support of other European partners in an emergency. In the draft, “Given that not all Member States have mutual solidarity agreements, the Commission proposes provisions directly applicable in the absence of such solidarity agreements.” Brussels will also propose an extension of the obligation of solidarity to Member States with unconnected liquefied natural gas storage facilities, as in Spain, which has seven regasification plants. “This will ensure that we are prepared and ready to act if necessary,” continues Brussels.
As Simson progresses, the plan will also consider the possibility of further cuts in gas consumption. One option would be to enforce the 15% cut target, from -7% in the case of Spain and Portugal, adopted by 27 countries last July, and revise the targets if they are deemed insufficient. Regarding the possibility of imposing an upper limit on the price of gas used to generate electricity, ‘Iberian exception‘ what they have owned Spain and PortugalThe Commission opens the door to developing ways to limit the impact of gas on the electricity bill, but does not currently recommend extending the mechanism to the rest of the EU because it would pose “risks” given the diversity of energy. mixing, connection and distribution systems. “We need a solution that works for everyone and aligns with our goal: not to increase gas consumption and not to manage flows beyond EU borders.” The draft also does not include capping the gas prices demanded and opposed by the country for two weeks. Germany feared that it would cause famine and risk decline.