technical Info
Any deal could hinge on technical details, including how high the price cap is, which gas contracts it applies to, and safeguards, such as enabling the EU to suspend the cap immediately if it has unintended consequences. .
Hunting for a deal, the Czech Republic – which holds the EU’s rotating presidency – drew up a new proposal that would trigger the cap if prices hit the 200-220 euro per megawatt hour range three to five days into the front month. exceed. Contract at Dutch Title Transfer Facility Gas Hub.
The contract price would also need to be 35 euros higher than the reference price based on current liquefied natural gas (LNG) price estimates.
The offer is lower than the 275 Euro/MW price cap proposed by the European Commission. The previous agreement included a cap of 220 Euro/MWh, but a dozen countries, including Greece and Italy, asked to lower it.
Countries in the pro- and anti-camps could each have enough votes to block a deal.
France may prove decisive. Three EU diplomats said it initially supported the price cap, but last week expressed concern over its potential impact on financial markets.
French Ecological Transition Minister Agnes Pannier-Ranachar said on Tuesday that any price cap should aim to “ensure the stability of financial markets”.
Last week the Intercontinental Exchange said the EU proposal could push up gas prices, while the European Central Bank said it could jeopardize financial stability.
The EU has already agreed emergency energy measures this year, including gas storage requirements.
The outcome of the debate on the cap could also determine other policies – including faster permits for renewable energy projects – after countries opted last month to block approval on gas price caps without a first no-deal.