At a meeting in Prague, the EU ministers responsible for energy found the lowest common denominator in dealing with the high energy prices. “There is general agreement among ministers that from 2023 we will have to buy gas together,” said Czech Industry Minister Jozef Sikela, who chaired the meeting in Prague on Wednesday. You also have to show solidarity and save more energy. “We also agreed that we need to change the current price index to make it more resilient to speculation and price spikes,” Sikela said, referring to the TTF gas trading platform’s price index. The ministers did not initially agree on a gas price cap.
The EU Commission was commissioned to cast the measures into law. “The Commission is working to present a package of proposals on October 18,” EU Energy Commissioner Kadri Simson said after a meeting with EU energy ministers in Prague. The commissioner promised that it would not be the last package of measures by the Brussels authorities. After the Commission has presented the concrete legislative proposal, the EU states still have to agree to it.
Stores should be filled together
The measures that the ministers have agreed on are in line with the position of the federal government. Federal Minister of Economics Robert Habeck (Greens) had campaigned several times for joint gas purchases. “If Europe, as a major buyer, uses its market power strategically, then it will bring prices down,” said Habeck in Berlin in the afternoon. Simson said that the joint purchases would focus particularly on filling the stores for next winter in a coordinated manner. The EU states had already agreed on voluntary joint gas purchases in March, but a coordination platform has provided little concrete information.
The federal government also supports a reform of the price index on the gas trading platform TTF. “That will have a clearly price-lowering effect,” said Habeck. Many purchase contracts are based on the TTF price index, which fluctuates greatly. State Secretary Sven Giegold said that one must ensure that the high prices on the short-term spot market do not damage long-term purchase contracts. According to Simson, the EU Commission is working on an alternative price index to the TTF, which should be able to work in the next filling season.
No agreement on gas price cap
However, the Commissioner warned that citizens and businesses cannot wait and that action must be taken immediately to tackle the high prices. However, there was no agreement on a gas price cap that many EU countries had called for. One proposal is to limit the price of gas used in electricity production. Something similar is already being implemented on the Iberian Peninsula. However, Germany and the Netherlands, among others, fear that this could increase gas consumption. “We will see over the weekend how we can go ahead with capping the price of gas for power generation, whether it is ready for a large majority of member states to support this measure,” said Simson. In any case, a temporary mechanism to cap gas prices should be part of next week’s package.
Simson also insisted on saving more gas. “Any action we take to lower prices must not send the wrong signal and increase consumption in the EU.” One possibility is to raise the Union alarm for gas shortages, said the commissioner. As a result, states commit to reducing their gas consumption by at least 15 percent, with a few exceptions. Overall, the EU has already reduced its gas consumption by 10 percent, said Simson.
The EU Commission will also propose how solidarity between EU countries can be strengthened in an emergency, since only a few states have concluded solidarity agreements on gas supplies, Simson said. Germany has signed agreements with Austria and Denmark on solidarity gas deliveries in the event of a supply crisis.
Press release (in English)
