One proposal to counterbalance Russia’s cut in flows and another to finally calm prices. The EU is preparing to enter the heart of its energy counter-offensive and, above all, to study the market reform requested by many member countries. The proposal risks a long process. The prices of methane are still rising. The so-called decoupling is being studied, that is the decoupling of the price of electricity from that of gas that has been in place for twenty years now.
The crux is timing: the Commission, until a few days ago, planned to bring the reform to light after the summer but with prices constantly rising, the pressure of the Member States is also rising. Trying to open a window for an acceleration as early as July. Bad proposal risks a long process. The prices of methane are still rising. “We are analyzing whether a different calculation (between gas and other energy prices) is possible to moderate this market while the crisis lasts”, she explained.
It would therefore be a temporary measure, to be used at least until the war in Ukraine is over in the same way as the derogation granted to Spain and Portugal for the implementation of a price cap for electricity until the spring of 2023. Certainly, in Brussels they are becoming convinced that, in this way, the system does not hold up. Compared to the times when the price of electricity was linked to that of gas, renewables are more used and less expensive. It is no coincidence that Emmanuel Macron himself, several weeks ago, had indicated the indexing system as “absurd”. But the proposal risks a long process. The prices of methane are still rising. The consensus on the need for price system reform is far from unanimous in Europe. And the possible side effects must be carefully evaluated: in the Iberian Peninsula, for example, the price cap has caused gas consumption to skyrocket.
Furthermore, at Palazzo Berlaymont, they deem it more urgent to secure supplies: in mid-July, President Ursula von der Leyen will present her proposal, which essentially hinges on two pillars: the containment of energy demand and greater gas sharing, through the pipes that cross Europe. On Wednesday, at the plenary debate of the Eurochamber on the European Council, the topic will return to the center of attention, also because Czech Prime Minister Petr Fiala will illustrate the European semester led by Prague, which gives top priority to energy security.
It is no coincidence that the Czech presidency has already given ample availability to the possibility of an extraordinary meeting of the energy ministers, to be held in the second half of July. Meanwhile, methane prices continue to travel to alarming heights. Natural gas closed higher on the market in Amsterdam and futures contracts for the month of August gained 1.31%, reaching 165.07 euros per MWh. The risk is that the situation will worsen starting from 11 July, when Russia will close the tap that feeds the Nord Stream for ten days – officially for maintenance.. And today Moscow has returned to attack on energy: the price cap on ‘expensive’ oil to the US could bring the price of crude oil to over $ 300-400 per barrel, warned former president Dmitri Medvedev.
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The EU is working to decouple the price of electricity from gas – Economy
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