The gas price on the TTF wholesale platform may be capped for certain contracts in the future. This was proposed by the European Commission on Tuesday. To avoid supply bottlenecks, the price cap must be monitored regularly and be able to be lifted at any time.
In concrete terms, there should be a maximum price for gas that is traded one month in advance. The ceiling would automatically come into effect if it is at least 275 euros per megawatt hour for two weeks. Another requirement is that the price must be at least 58 euros higher than the prices on the world market for liquefied natural gas (LNG). This was announced by EU Commissioner for Energy Kadri Simson on Tuesday.
The background to the proposal is the sharp rise in gas prices. At TTF, a megawatt hour cost about 350 euros in August. Since that record level, the price has been dropping regularly. It is now 116 euros per megawatt hour and that is still a multiple of last year. Many European supply contracts are linked to the TTF price.
Not a permanent solution
Commission representatives therefore argued that the price cap would calm the markets. However, it is not suitable for permanently lowering prices. The limit should only apply to large customers. Gas must also be freely traded outside the TTF. Quantities bought or sold in the short term, which are intended to guarantee supply for the coming days, remain unaffected. The implementation of the proposal requires the approval of the individual Member States.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
