The European countries agree to the regulation mechanism of the energy market with the approval of Germany, the abstention of the Netherlands and Austria; and Hungary’s ‘no’
The countries of the European Union (EU) agreed on Monday to impose a ceiling of 180 euros per megawatt hour (MWh) on the price of gas imports to the continent. The proposal was blocked for weeks by Germany and the Netherlands, which saw this mechanism as a risk to security of supply. However, the energy ministers managed to bring the positions closer together and the tool will be adopted with the approval of Berlin, the abstention of Austria and the Netherlands and the ‘no’ of Hungary. This mechanism is activated when three days in a row the EUR 180 is exceeded on the European market and at the same time there is a difference of EUR 35 with the international markets.
The EU’s ultimate goal was to send a “strong signal” to markets that the bloc will not price gas in the context of the energy crisis caused by the war in Ukraine. And finally it has been achieved, albeit not unanimously. The Twenty-Seven have modified Brussels’ initial proposal that raised a ceiling of €275 for gas, far from what countries like Spain, Belgium or Greece were asking for.
The mechanism will come into force from 1 February 2023 and will be automatically activated once the three requirements are met: a price higher than 180 euros/MWh for three consecutive days and with a difference of 35 euros compared to the rest of the markets internationally . Once activated, the mechanism will apply for 20 days.
The main stumbling block in the negotiations was the activation price, which some considered too high to go live and others too low. According to the French energy minister, Agnès Pannier-Runacher, it is really important that the correction mechanism allows monitoring and rapid reaction in case of activity, something that can be achieved by setting a “short” activation period. The numerous safeguards finally convinced Germany, the country most opposed to this measure so far.
Source: La Verdad
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