Energy costs must come down, the energy ministers agreed on Thursday in Brussels. But beyond that, the special meeting did not come to any conclusion. The Austrian Energy Minister Leonore Gewessler (Greens), for example, expressed reservations about the EU Commission’s proposal for a gas price cap in European wholesale trade. “I think it’s important to leave no stone unturned to lower gas prices,” Gewessler said ahead of the meeting. But at the same time, the security of supply argument must be taken seriously. Gewessler expects “intense” debates on this proposal.
The EU Commission wants to curb particularly severe price swings in European wholesale through a price cap. This affects certain transactions at the wholesale center TTF, to which many supply contracts in the EU are linked. Specifically, the cap would apply automatically if the price for gas to be delivered in the following month exceeded 275 euros per megawatt hour (MWh) for two weeks and at the same time was at least 58 euros higher than the reference price for liquefied natural gas (LNG) on the world market.
While countries like Germany or the Netherlands expressed similar skepticism as Austria, the price cap does not go far enough for many other EU countries such as Italy, France, Malta, Belgium and Poland. “For us, this is a joke after so many weeks of discussions and proposals,” said Polish Environment Minister Anna Moskwa.
“All Kind of Unhappy”
“We are certainly in very different positions in Europe in this crisis,” said Gewessler. As a landlocked country, Austria does not have the opportunity to set up LNG terminals on the coast, but is dependent on pipelines. The different supply structures “of course make the management of this crisis more challenging,” said the energy minister.
German State Secretary Sven Giegold said: “To sum up, everyone is somehow unhappy with the Commission’s proposal.” For Germany it is “important that the markets don’t get mixed up, but instead that we tackle the causes of the high prices,” said Giegold. This is due to the dependence on Russian gas, the shortage of gas and high consumption. The German Economics Minister Robert Habeck meanwhile rejected criticism of the German position on a European gas price cap. “We do not block,” said the Green politician to the “Handelsblatt” on Thursday. The EU states have agreed on a flexible and clever cap for times of excessive prices. “But I’m skeptical when it comes to a fixed price cap in the market because it would be either too high or too low.”
In a broadcast, the Chamber of Labor criticized the lack of the “Iberian model”. The price cap is a “placebo correction mechanism. It would not have made a difference at any time during the crisis. The prices in the past few months would not have been affected at all,” said AK energy expert Josef Thoman.
Experts argue that the mechanism would not have been triggered in August had it already existed since the price limit was not breached for two weeks. On August 26, the gas price on the TTF reached its all-time high of EUR 340 per megawatt hour, and is now around EUR 130. The next meeting of energy ministers will take place in December. Until then, a solution to the gas price cap may be possible.
Natural gas from Croatia
Austria, meanwhile, continues its search for alternatives to Russian gas. Now more liquid gas is to come from Croatia to Austria, Chancellor Karl Nehammer (ÖVP) agreed on this during a visit to Croatia with Croatia’s Prime Minister Andrej Plenkoviæ. Croatia wants to expand the capacities of its LNG terminal on Krk and develop it into a hub for gas supply in the region. A pipeline expansion is necessary for this.