🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

EU countries eye deal on more energy measures within weeks

Published 10/10/2022, 08:30 AM
Updated 10/10/2022, 08:36 AM
© Reuters. Gas installation is pictured at the Cavern Underground Gas Storage (CUGS) Kosakowo facility, near Debogorze, Poland April, 30. 2022. Picture taken April 30, 2022. REUTERS/Kacper Pempel
NG
-

By Kate Abnett

BRUSSELS (Reuters) - European Union countries will seek a November deal on more emergency measures to tackle high gas prices, officials said, although countries still disagree on what form those measures would take and whether they should cap gas prices.

As Europe heads into a winter of scarce Russian gas supplies and high energy costs, EU energy ministers will meet in Prague on Wednesday to discuss their next move, having already rushed through emergency EU energy windfall profit levies, gas storage filling obligations, and electricity demand curbs.

A majority of EU states say a gas price cap should come next, but disagree on whether it should apply to all gas trades, long-term contracts, or just gas used to produce electricity. Others, including Germany, remain opposed.

A senior EU official said Wednesday's meeting should narrow down the options so the European Commission can propose fresh legislation this month.

"Member states use the same words, not necessarily in the same meaning, so we need to narrow that down," the official said.

Ministers on Wednesday will also discuss joint gas buying among countries, and the potential to negotiate lower prices with non-Russian suppliers as ways for the EU to tame energy prices.

The Czech Republic, which currently chairs meetings of EU ministers, would call an emergency energy ministers' meeting in November to approve the proposals, the official said.

Three EU country officials agreed with that timeline, but said states still disagree on what measures to take. "It's difficult to see consensus because everyone has their own preferences," one said.

The senior EU official said that in their view countries were leaning towards the "Iberian model" of capping the price of gas used for power generation.

Spain and Portugal capped the price of gas used in power generation in June, which has helped curb local power prices. The idea has gained traction among other countries, although some worry it could raise EU gas demand, since Spain's gas use increased under the measure.

EU energy commissioner Kadri Simson last week said Brussels could learn from the scheme, but that it was not suitable to immediately roll out Europe-wide because of local specificities including Iberia's numerous liquefied natural gas terminals, which many EU countries lack.

© Reuters. Gas installation is pictured at the Cavern Underground Gas Storage (CUGS) Kosakowo facility, near Debogorze, Poland April, 30. 2022. Picture taken April 30, 2022. REUTERS/Kacper Pempel

Countries would also need to decide how to compensate gas plants for the gap between the capped price and the higher market price at which they buy fuel, be it through public funding or a levy on other energy generators.

"It would be really costly for many member states," one of the officials said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.