Natural gas prices in Europe were little changed, with traders awaiting the energy intervention plan due to be unveiled by the European Commission on Wednesday.
(Bloomberg) — Natural gas prices in Europe were little changed, with traders awaiting the energy intervention plan due to be unveiled by the European Commission on Wednesday.
Authorities are designing measures to try to rein in an unprecedented energy crisis that has fueled inflation, hurt industry and left nations on the brink of a recession.
The bloc plans to work out a price index for imports of liquefied natural gas, Energy Commissioner Kadri Simson said on Tuesday. That could be a solution to address soaring gas costs, while a previously considered price cap won’t be included — at least for now — amid concerns that it could discourage supplies to Europe, according to the latest draft seen by Bloomberg.
Europe Seeks LNG Index as Price Cap Idea Raises Supply Risks
LNG has been key to replacing missing Russian pipeline gas supplies and helping Europe to fill storage sites to prepare for winter. But there is no regional price on imports of the super-chilled fuel. The benchmark European price — linked to the Title Transfer Hub in the Netherlands — is a pipeline index and “no longer properly reflects the real supply and demand of the market,” Simson told members of the European Parliament in Strasbourg.
The European Commission, the EU’s executive arm, will also propose to cap power-generation revenues of renewable and nuclear companies at 180 euros per megawatt-hour, and to set a mandatory goal of lowering demand during selected peak hours by 5%, according to the draft.
There is uncertainty on which measures will be agreed by member states, which are divided, and have to sign off on the plans. The Czech Republic, which holds the EU’s rotating presidency, has called another emergency meeting for Sept. 30, with the goal of getting get a deal in place before October, when the winter heating season starts.
Front-month Dutch gas futures traded 0.07% lower at 198.47 euros per megawatt-hour by 8:46 a.m. in Amsterdam.
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