European Union (EU) ministers have agreed a plan to cap the price of gas, ending months of argument over how to handle the cost of soaring energy prices after Russia cut gas supplies to Europe.
The Guardian reports that a gas price cap will kick in if prices on the main European gas exchange, the Dutch Title Transfer Facility (TTF), exceed €180 ($191) a megawatt-hour for three consecutive working days, far lower than the European Commission’s original proposal of €275 a MWh, which had been derided by cap-supporting countries as a joke.
Belgium, Spain and Poland had been leading the charge for a price cap below €200, amid surging energy prices.
However, in a concession to countries that feared energy suppliers would send their gas supplies to China or elsewhere when faced with a European price cap, another condition must also be met. The €180 cap will only be triggered when the TTF price is €35 higher than a global reference price for liquefied natural gas (LNG) for the same three successive working days.
This compromise persuaded Germany, the EU’s biggest gas consumer but a sceptic over price caps, to back the plans. Berlin was also won over by a change to a legal text on permits for new energy grids, rewritten with the aim of speeding up the deployment of renewable energy.
Other sceptics were not convinced, though: the Netherlands and Austria abstained, while Hungary voted against the plans.
The cap can be triggered from 15 February 2023 and will apply for one year.
The Kremlin spokesperson, Dmitry Peskov, said the price cap was an attack on market pricing and unacceptable, Russia’s Interfax news agency reported.
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