The European Union’s energy ministers on Tuesday began looking for some common ground to determine what tentative deals their leaders could strike last week to ease the storm. energy crisis for their citizens while maintaining a united front in Russia’s war in Ukraine.
With winter approaching, home energy bills piling up and some businesses teetering on the brink of bankruptcy, there’s a wave of popular protest against the 27-nation bloc to move much faster. But fluctuating global energy markets and different energy mixes across member states – from nuclear to natural gas and other fossil fuels – make smart decisions as fast as possible. Flashing is almost impossible.
“We have to be quick. And I won’t hide that I’m a little disappointed that we’re not moving as fast as we can,” said Czech Deputy Prime Minister Jozef Sikela, who chaired Tuesday’s meeting.
“There is urgency, because our industries are destabilizing and can no longer face international competition,” said French Energy Minister Agnes Pannier-Runacher.
Following vague commitments by their leaders last Friday, ministers are considering updated proposals from the European Commission, the EU’s executive body, such as variations of gas price caps and general natural gas purchases to target volatility in the energy market. higher bill.
But Sikela says the measures leave something to be desired: “At least for me – I’m simply – I’m missing a lot of things in the proposal.”
So instead of having an agreement on gas price caps and other decisions to keep prices lower within days, Sikela is looking for a deal by the end of November.
The key will be deciding what targeted steps will actually help keep businesses afloat and households warm in the coming months.
Due to trade disruptions tied to Russia’s war in Ukraine, EU nations have reduced their share of overall Russian natural gas imports to the EU from 40% before the invasion to around 7%. And the gas storage has far exceeded the target and reached about 95% capacity before the winter heating season.
The EU has been counting on increasing imports of liquefied natural gas, or LNG, including from the United States, to help address a drop in Russian supply. The bloc will need more LNG shipments in the winter of 2023 to refill its stockpiles that will still include Russian gas this year.
Coupled with mild weather so far and a commitment to principled unity last week, EU leaders say the efforts have helped bring gas prices down from record highs over the summer.
The price of natural gas by European standards TTF has continued to fall, to the lowest level since mid-June this week. Gas traded at 94 euros per megawatt-hour on Tuesday, a far cry from its peak of 349.90 euros per megawatt-hour on August 26.
The common question posed by the frenzied EU considerations is whether any regulatory changes aimed at limiting gas prices could ultimately self-defeat by encouraging fuel consumption. EU governments have agreed to reduce gas demand by 15% between August and March 2023.
The EU is also pursuing a central plan for next year: joint gas purchases. The aim is to take advantage of the EU’s single market power to obtain more favorable prices from foreign suppliers outside Russia.
That’s what Germany sees as a key driver that could have an immediate impact.
“Europe has great market power,” said German Energy Minister Robert Habeck. “When the big players can reach an agreement, should or are allowed to buy together, then the market power of Europe will show.”