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EU set a 180 Euro per MWh cap.

 

EU cap

The EU has agreed to cap gas prices when they hit €180 a megawatt hour for three days, despite fears that such an intervention will fail to calm markets and could threaten European supplies. The cap, which will come into force on February 15, is the latest attempt to curb soaring energy prices in the bloc and help consumers after Russia reduced much of its gas exports to Europe. «We have solved the last piece of the energy puzzle,» said Jozef Síkela of the Czech Republic, which holds the rotating EU presidency, after a meeting of his fellow energy ministers. « whether ICE can continue to operate fair and orderly markets for TTF from the Netherlands as per our European regulatory obligations,» it said after yesterday’s agreement.


The cap will initially apply to gas contracts traded on all European trading hubs for supplies one month, three months and a year ahead. Prices must also be €35/MWh above an average of global liquefied natural gas prices for three days to be triggered. Month-ahead gas futures on the Netherlands-based benchmark were down about 8 per cent at €107/MWh yesterday, far below a high of more than €340/ MWh in August but still well above the €69/MWh at the end of 2021. The Kremlin described the measure as «a violation of the market pricing process» and that Russia would «thoroughly weigh the pros and cons» while preparing its response to the EU move.

The €180/MWh ceiling compares with the trigger of €275/MW for ten consecutive days first proposed.

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  1. Anonymous20 December 2022 at 18:58

    Well, they have to do something, no? This measure is as good (or as bad) as any. Time will tell if it's the right one but I do think they need other measures in place to make sure 2023 is not a redo of 2022.

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