(MENAFN- AzerNews) By trend
A European gas price cap at 275 euros (283 U.S. dollars) per
megawatt hour (MWh) has been proposed, Energy Commissioner Kadri
Simson announced in Strasbourg, France, trend reports citing xinhua .
'We propose an upper ceiling on the month-ahead TTF (Title
Transfer Facility) price in case it exceeds 275 euros per megawatt
hour. Beyond that price, transactions will not be able to take
place.'
The market correction mechanism will be triggered when two
conditions are met, the Commissioner explained. Firstly, when the
gas price exceeds 275 euros for two consecutive weeks. Secondly,
when the spread between the TTF price and global liquefied natural
gas (LNG) price is 58 euros or more for ten consecutive trading
days.
When both these conditions are in place, the mechanism will be
automatically activated, and will not require any additional
procedures or decisions.
Simson told a press conference that this is not a regulatory
intervention to set the price on the gas market at an artificially
low level; rather, it is a last resort solution to prevent episodes
of excessively high prices which are not in line with global price
trends.
However, she added: 'This is not a silver bullet that will bring
gas prices down. But it provides a powerful tool that we can use
when we need it, complementing our more structural efforts to lower
prices, namely by controlling our demand and ensuring sufficient
gas supply for Europe through joint purchasing and active external
energy policy.'
The proposals will be debated by energy ministers from the
bloc's 27 member countries on Nov. 24.
However, the Association of European Energy Exchanges said that
the mechanism poses a serious threat to the region's security of
supply and financial stability, and will do little to achieve the
goal of lowering energy costs.
In August, prices on the TTF virtual trading point surged from
220 euros to almost 320 euros per MWh, while global LNG prices were
significantly lower. Since then, gas prices have fallen
considerably, to 116 euros currently. (1 euro = 1.03 U.S.
dollars)
--
Follow us on Twitter @azernewsaz
MENAFN23112022000195011045ID1105225608
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.