 "EU, European Union")
European Union energy ministers on Tuesday started seeking some common ground to flesh out the barest of tentative agreements that their leaders could find last week to soften the blow of an energy crisis for their citizens while maintaining a united front during Russia's war in Ukraine.
With winter approaching, home energy bills piling up and some businesses teetering on the brink of bankruptcy, there is a popular outcry for the 27-nation bloc to move much faster. But the fluctuating global energy markets and different energy mixes among member states ranging from nuclear to natural gas and other fossil fuels make smart, lightning-quick decisions nearly impossible.
We have to be fast. And I will not hide that I am slightly disappointed that we are not going as fast forward as possible, said Czech Deputy Prime Minister Jozef Sikela, who chaired Tuesday's meeting.
There is urgency, because our industries are destabilized and can no longer face international competition, French Energy Minister Agnes Pannier-Runacher said.
After the vague commitments of their leaders last Friday, the ministers were looking at updated proposals from the European Commission, the EU's executive arm, such as variations of a gas price cap and joint natural gas purchases meant to target volatility in energy markets, which sends bills higher.
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But Sikela said the measures left something to be desired: At least for me I simply I'm missing a lot of things within the proposal.
So instead of having a deal on a gas price cap and other decisions to keep prices lower within days, Sikela is looking for agreement by the end of November.
Key will be to decide what targeted steps would actually help to keep businesses running and households warm over the coming months.
As a result of trade disruptions tied to Russia's war in Ukraine, EU nations have reduced the overall share of Russian natural gas imports to the EU from 40% before the invasion to around 7%. And gas storage has already far exceeded targets and stands at some 95% of capacity ahead of the winter heating season.
The EU has relied on increased imports of liquefied natural gas, or LNG, including from the United States, to help address the fall in Russian supplies. The bloc will need LNG shipments even more in winter 2023 to refill storages that still include Russian gas this year.
Along with mild weather so far and their commitment in principle last week to stand united, EU leaders said the efforts have helped drive down prices for gas from record summer highs.
Natural gas prices on the European benchmark TTF have been steadily dropping, falling to their lowest level since mid-June this week. Gas was trading at 94 euros per megawatt-hour Tuesday, a far cry from the peak of 349.90 euros per megawatt-hour on Aug. 26.
The general question hanging over the frantic EU deliberations is whether any regulatory changes meant to curb gas prices would ultimately be self-defeating by encouraging consumption of the fuel. EU governments have already agreed to reduce demand for gas by 15% between this past August and March 2023.
The EU is pursuing a plan that focuses on next year, too: joint gas purchases. The aim is to leverage the EU's collective market weight to gain more favorable prices from foreign suppliers other than Russia.
It is something that Germany sees a prime mover that would have an immediate impact.
Europe has great market power," Germany Energy Minister Robert Habeck said. When the big players can get to an agreement, should or are allowed to purchase together, then Europe's market power will show.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
