There is no respite for the price of gas in Europe

CopyAMP code

The gas price in the Dutch benchmark, a reference for the European market, it trades well above 230 euros per megawatt hour: why does the cost of the raw material continue to rise?

The intervention of Ursula von der Leyen at the EU Parliament, with the reading of the speech on the State of the Union, it shook the Amsterdam index again, extending the climate of uncertainty about the near future of gas and electricity prices.

Benchmark futures increased up to 3.3%. The European Commission’s plan includes raising € 140 billion for consumers to be made on the extra-earnings of energy companies, as well as a mandatory brake on peak energy demand and an increase in liquidity.

However, doubts remain about how the measures will be implemented as member states are divided and have to approve EU plans at national level.

Because the price of gas in Europe is still rising

The natural gas has risen again, with traders and others alike evaluating whether Europe’s measures to contain the energy crisis will be sufficient to limit fuel costs, after the price cap proposal has not yet received full approval and the others presented by von der Leyen are proving complex.

There is a certain criticality surrounding the plan vehemently enunciated by the President of the Commission.

First of all, Brussels he wants EU member states to collect 140 billion euros from the profits of energy companies to mitigate the blow of record prices this winter. A proposal of electricity business tax that do not burn gaswhose price has recently soared, would be accompanied by other measures on the groups of fossil fuels.

There is talk of a mandatory threshold for i prices practiced by companies that produce low-cost energy and not gas, such as nuclear and renewable groups. Companies should provide EU states with data on excess profits generated beyond this level, which the commission tries to set at 180 € / MWh. But member countries would be free to put in place their own lower thresholds.

Furthermore, those payments and the tax would still be “All emergency and temporary measures” in the face of far more lasting needs, such as cutting electricity demand, lowering gas prices and ensuring long-term security of supply.

CopyAMP code.

von der Leyen also said Brussels will work on a comprehensive reform of its energy markets to break “The dominant influence” of the price of gas on the costs ofelectricity. These markets need to be redesigned so that consumers can better exploit the benefits of low-cost renewable energy, she said, adding that an alternative to the commonly used European benchmark for gas prices should be found. Dutch TTFwhich is largely dictated by pipeline gas and not by LNG, for example.

Analysts uncertain about the EU plan. And the gas rises

The point of this whole series of ideas was summarized in Financial Times by Laurent Ruseckas, of S&P Global Commodity Insights, talking about proposals “All extraordinarily complex, impossible to elaborate and implement in time for the winter even if there was a political consensus behind them, which is not there”.

Furthermore, diplomats and officials predict that Member States will want more flexibility to be integrated into the proposed EU regulation, to take into account their own national measures limiting price increases and different sector structures.

A Citi analyst, on Milano Finanza, reiterated: “We are surprised that the focus of Europe’s updated energy plan is not focused on reducing gas demand.

He also added, reflecting on the tax for companies’ profits fossil fuels that “We are reaching a point where there is no good blood between the oil industry and the EU, which could open legal avenues. And the decision to use 2020, a year in which global mobility has stopped due to Covid-19, as a “normal” year in the calculation of extra profits would seem a key issue. “

In this context of strong doubts about the near future of Europe in the energy sector, the gas price continues to gallop.

The article is in Italian

Tags: respite price gas Europe

PREV still dead at work – La Bottega del Barbieri
NEXT He ends up in handcuffs after being hit in a well-known residence