The price of gas will once again be on the table at the extraordinary summit of heads of state and government of the European Union that is being held tomorrow in Prague. Criticized in numerous capitals for her delay in accepting the seriousness of the crisis, the president of the European Commission, Ursula von der Leyen, yesterday sent a roadmap to the capitals of the Twenty-seven to promote a cap on the price of gas and limit the consumer bills but, he assures, "without endangering" the security of supply, the great fear of Berlin, which has so far opposed such a measure.
For the first time since the debate began, Von der Leyen has supported the idea of applying an intervention on the price of gas that goes beyond what arrives by gas pipeline from Russia. It is the only thing that the Commission has agreed to do so far, despite the fact that there are already more than 15 countries that have asked it by letter to adopt a more general cap on the price of gas.
“It is a temporary solution until we have a new price index”, more representative than the current one, the Dutch TTF, pointed out Von der Leyen in a speech before the European Parliament in which he proposed the extension to the entire EU of the Iberian mechanism, the system adopted by Spain and Portugal that since June limits the price of gas used to generate electricity so that its shortage does not contaminate the entire market.
The Iberian exception is one of the pieces of the puzzle that the Community Executive has been putting together for weeks to respond to the rise in energy prices with less speed than that demanded by France, Italy, Spain, Poland or Belgium, which demand immediate legislative proposals. "It is urgent to create a true energy union," defended the president of the European Council, Charles Michel, yesterday, joining the chorus of voices calling on Brussels to make legal proposals now.
The first step of the roadmap that Von der Leyen proposes is to negotiate a band of maximum prices with reliable gas suppliers, a category that includes Norway, the US and Azerbaijan. Contacts have intensified in recent days both with the Government of the Nordic country and with the company Equinor. Although the talks are not being easy, Brussels trusts that the mutual interest in having a sustainable price level in the medium term prevails and it will be possible to reach an agreement.
The next step would be to impose a cap on gas coming from Russia, as an "unreliable supplier". Currently Russian gas represents less than 10% that the Union consumes, but the objective is to dry up the Kremlin's war machine a little more and not only friendly countries are penalized by European energy policy. Looking ahead to next year, to prevent competition between member states from inflating gas prices, the EC plans to create a platform for joint purchases.
Changes in trade flows since the EU decided to break ties with Russia have meant that the price indicator used until now, the TTF, is no longer representative of the European market, now dominated by liquefied gas, admits the Commission. Its experts are working on the design of an alternative price index. And this is when, according to Von der Leyen's roadmap, it is appropriate to set a cap on the price of gas for the generation of electricity according to the Iberian model.
The lack of interconnections between the peninsula and the rest of the EU minimized the problem of electricity leaking at lower prices (it is a very limited amount that Spain and Portugal pass on to France) and Brussels wants to make sure that this does not happen on a scale European. He also wants guarantees that the system does not lead to an increase in consumption. Von der Leyen trusts that, with this sequence, the countries that are reluctant to cap the price of gas will accept a European intervention in this sense. The measure would be "a first step towards a structural reform in the electricity market."
