A proposal for an EU gas price cap is unlikely to be among detailed measures set to be outlined by the European Commission this week on tackling the energy crisis as Brussels instead focuses on demand reduction and accelerating the REPowerEU strategy.
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Register NowThere has already been push-back on the proposal from key EU gas supplier Norway, with Prime Minister Jonas Gahr Støre saying Sept. 12 he was "skeptical" about the effectiveness of an EU gas price cap.
Platts assessed the Dutch TTF month-ahead price at a record-high Eur319.98/MWh Aug. 26, according to S&P Global Commodity Insights data. It was last assessed at Eur191.98/MWh Sept. 12, still up by 230% year on year.
EU energy ministers on Sept. 9 discussed a wide range of options for managing high gas and power prices, including a potential gas price cap and a number of measures in the electricity sector.
Ministers rejected the idea of a price cap on Russian gas specifically, but there was some support for a potential cap on gas prices more generally.
According to the Greek energy ministry, 15 member states and Germany -- under conditions -- agreed to propose imposing a cap on wholesale gas prices.
However, that means as many as 11 member states may have opposed the plan, with ministers agreeing that more time was needed to work on the practicalities of a gas cap.
EU commissioners are meeting Sept. 13 in Strasbourg, with EC President Ursula von der Leyen set to give her state of the union address on Sept. 14 which is expected to include details of the proposed measures.
Czech industry ministry Jozef Sikela, who chaired the Sept. 9 energy council meeting under the Czech EU presidency, said Sept. 13 he had convened another emergency meeting for Sept. 30 to discuss the EC's proposals.
Global market
Ahead of the college meeting, von der Leyen said the EC's work was focused on smart demand reduction, energy sector contributions to support vulnerable households and businesses, liquidity support for utilities, and accelerating the REPowerEU initiative.
"On the cost of gas, we continue to work on answers adapted to a global market to ensure lower prices in Europe while guaranteeing security of supply," von der Leyen said.
According to sources, there is concern among EU member states that capping the price of imported gas, for example, could jeopardize supply security, with producers opting to send gas to higher price markets instead.
The global LNG market in particular remains very competitive, with Asia also looking to secure cargoes over the winter.
"Where they [member States] cannot agree is on the idea of a gas cap. That is seen as just too difficult inside the EU," BBC Europe Editor Katya Adler said Sept. 13 on the Today Program.
Norway's Støre said it was important not to introduce measures that had "unintended consequences" and -- in the worst-case scenario -- could make matters worse in the longer term.
He also warned against short-termism. "Predictability and a long-term perspective will be an advantage for both gas producers and customers in Europe," he said.
Adler said that what was attracting support was reducing demand for electricity across the EU, although possibly not a mandatory measure as proposed by the EC.
"The concrete measures the EC thinks the EU can agree to in the next week or two include 'recycling profits' of energy producers with low overheads benefiting from high prices, and using that levy to help struggling households and businesses across Europe," she said.
Italian, Greek pressure
Czech industry minister Sikela said Sept. 9 the gas price cap was "from the market point of view" particularly difficult.
"We need a little bit more detail," Sikela said. "There is a prevailing case from countries that we need such a cap, but [the Czech Presidency] and the Commission need a little bit more time [to consider] how this should be implemented," he said.
Two of the biggest supporters of a gas price cap are Italy and Greece.
Italy's undersecretary of state for Foreign Affairs, Manlio Di Stefano, said Sept. 5 there was an "urgent" need for a gas price cap to ease the burden on consumers.
Speaking at the Gastech conference in Milan, Di Stefano said the price cap would be a logical response to the high prices driven up by Russia's supply curtailments.
"Concerns over gas supplies are weighing on European energy markets as Moscow is arbitrarily reducing gas flows to drive up prices," Di Stefano said.
"The most recent [Russian] gas cuts across Europe and the rise in prices reiterate the urgent need to accelerate the proposal for a price cap on gas," he said.
Di Stefano said Italy had been proposing a gas price cap for months. "At the beginning we were almost alone. Now, we are confident that some concrete measures will be taken in this regard to reduce high energy prices," he said.
Meanwhile, Greek Prime Minister Kyriakos Mitsotakis as early as March called for a temporary intervention in the European wholesale gas market, saying prices were no longer being driven by normal market forces.
In a letter to von der Leyen, Mitsotakis offered a six-point plan to counteract the escalation in gas prices.
He proposed a "targeted and temporary" market intervention to normalize the situation including a cap on TTF prices as well as a fluctuation band to limit volatility.