The perfect storm that has caused the energy crisis in Europe is still far from abating but, once national gas reserves are almost complete, the European Commission has its sights set on what will happen next winter, rather than applying major interventions in the markets that may have an immediate effect on the prices paid by consumers, for example the extension of the Iberian mechanism to other countries of the Union. It is what a majority of member states demands, but Brussels fears that it will produce undesired effects and continues to see it unclear.
"Thanks to all our joint actions, we have achieved our first objective, to be better prepared for this winter. Now we can take steps towards a true energy union," the president of the European Commission, Ursula von der Leyen, defended this afternoon. Practically all the initiatives that appear in the communication approved today by the College of European Commissioners (the launch of a joint purchasing platform, the design of an alternative price index for liquefied gas and the application of a corrective mechanism to the which fixes the price of what arrives by pipeline, currently a minority) are intended to come into force not this year but next, in order to refill the tanks.
The idea of setting a cap on the price of gas used to generate electricity similar to the one adopted by Spain and Portugal "has served to reduce the price of electricity and is worth exploring for its introduction at EU level, to see how make it operational," said von der Leyen. The Commission, however, has yet to find an answer to some "questions" it still has about its extension. "Before making any decision - a senior community official explained to the accredited press in Brussels - we must be sure that they do not produce an increase in demand or leakage of subsidized energy outside the EU".
The idea of adopting some kind of cap on the price of gas used to generate electricity is included in the roadmap proposed by Von der Leyen to European leaders ten days ago in Prague. At that summit it was confirmed that a path is opening up and there is a majority of countries willing to explore it, but Germany and the Netherlands continue to oppose it. And Von der Leyen still does not see it clearly, although the Commission is not opposed to countries that want to adopt it on their own, as Spain and Portugal do, presenting a proposal to it.
For the moment, the community executive proposes to focus on three measures that, added to the saving measures already adopted (taxes on extraordinary profits received by energy companies and the retail cap) will help governments to better face the next winter. In the first place, organize themselves to make joint purchases of gas in the wholesale market through a new European business consortium and use this channel to replenish at least 15% of the national gas reserves. In this way, community sources argue, bids between EU countries would be prevented from pushing prices up, as has happened this year.
"Joint purchases will especially help member states and smaller companies, those in a less favorable position, to access larger volumes of gas in better conditions as buyers," argues the European Commission, which has ended up embracing the proposal made a year ago by the Government of Spain, among the first to feel the crisis due to the structure of its market.
The second initiative included in the new communication from the community executive consists of developing an alternative price index for the liquefied gas (LNG) that Europe buys and whose price is currently set based on what enters through the pipeline, despite the fact that now, with the closure of the Russian gas pipelines, it is a minority.
And finally, Brussels proposes to introduce a corrective mechanism that introduces "a dynamic price broker" in gas transactions at the title transfer center (TTF) in Amsterdam, which serves as a reference price for European gas trade . If the proposal is accepted, the EU will set a daily price ceiling that will be activated in emergency situations. The figures are still to be defined.
All of these measures are considered an emergency response and are meant to be temporary. Brussels proposes that they be in force 12 months from their entry into force. The three initiatives raised today could come into effect early next year, in time to help member states buy more gas to prepare for the 2023-24 season. Meanwhile, to cushion the effects of the crisis, Brussels plans to redirect some 40,000 million euros not spent corresponding to the EU Cohesion Fund from the years 2014-2020 to measures aimed at supporting households and companies in trouble, up to a 10% of the total allocated to each state. In the case of Spain, this would mean being able to allocate up to 3,500 million euros for this purpose under less strict conditions than usual and in any region of Spain.
Von der Leyen will present his proposals to European leaders on Thursday, when a formal two-day European Council devoted to the energy crisis begins. In his letter of invitation to the summit, the President of the European Council, Charles Michel, insists that talking about the idea of putting a cap on the price of gas despite the fact that the Commission, which insists on seeking an almost total consensus on the matter which to date does not exist, still does not put a legislative proposal on the table to make it possible.
It remains to be seen whether the measures proposed today, especially the dynamic cap on the price of gas, are sufficient for countries like France, Italy, Poland or Spain, which have spent a year demanding more forceful measures to act on the price of electricity and the gas. At the last European summit, the informal meeting held 10 days ago in Prague, the Italian Prime Minister, Mario Draghi, reproached Von der Leyen for his delay in reacting. His proposals are fine, he told her, but they are "seven months late," with the EU teetering on recession. At least, the president of the European Commission will have an olive branch to tend to the Council: the proposals to reform the electricity market and seek alternative formulas to set the price of electricity will arrive in the first quarter of 2023 and not at the end of that year, as originally planned.
