Thriller with the energy crisis in Europe: The dispute over the ceiling, the 4 directions and Greece’s proposal

The theme of the energy crisis in Europe, as the member states do not seem to be getting the main issue, the management of accuracy and high prices. There was no “white smoke” from the Council of EU Energy Ministers regarding the Commission’s proposal for the price ceiling natural gas.

However, there were some extremely important developments, as the energy ministers reached a four-pronged agreement regarding the overall management of the crisis.

More specifically:

–Firstlymeasures aimed at limiting the income of low-cost power producers and introducing a solidarity contribution from fossil fuel companies to be used to cushion the impact of high energy prices on customers.

–Secondly, emergency and temporary intervention, including the gas price cap. “Special measures in this regard should also help limit the impact of high gas prices on EU electricity markets and on energy prices for customers. Such measures should aim to benefit European consumers in order to mitigate the social and economic consequences of today’s high energy prices and European companies in order not to jeopardize their competitiveness, while maintaining the incentive to reduce gas and electricity consumption energy and the market signal for decarbonisation,” the text of the Council’s conclusions reads.

–Thirdlyincentivizing a coordinated reduction in electricity demand across the EU to relieve pressure on electricity generation and address energy and high energy prices.

–Fourthto design emergency liquidity tools that will ensure that market participants have sufficient collateral available to deal with increased market volatility.

New extraordinary council in September

The President of the Council, the Czech Minister of Energy, Jozef Sikelá emphasized that the 27 Ministers of Energy agreed to invite the Commission to present, within days, legislative proposals for the four above sectors. He also announced that another extraordinary Council of Energy Ministers will be held before the end of September, in order to approve specific measures to reduce prices.

Also, when asked if the Commission would consider a wider cap on natural gas, Energy Commissioner Kadri Simpson replied that everything is under discussion. He recalled that the President of the Commission is in favor of a cap on the price of Russian natural gas through a pipeline, while regarding a broader cap on the price of natural gas that would also include LNG, Commissioner Simpson said that the safety of energy supply.

Regarding electricity market reform, Commissioner Simpson said she hoped the Commission’s legislative proposals would be ready by early next year.

The Greek proposal that “won” 15 votes

Mr. Skrekas repeated the proposal that the Prime Minister, Kyriakos Mitsotakis, had sent to the president of the European Commission for the imposition of a general ceiling on natural gas and the creation of a different pricing model, but expressed Greece’s disagreement with the imposition of a ceiling exclusively on Russian natural gas, as it will have the exact opposite of the intended effect on energy prices.

In addition, he pointed out the reduction in demand for natural gas and electricity that Greece has achieved in recent months, but requested that any relevant proposal of the European Commission be balanced so as not to have an impact on the functioning of the economy. During the meeting, 15 EU member states and Germany (subject to conditions) proposed to impose a horizontal ceiling on wholesale natural gas prices, the statement said.

Mr. Skrekas, during his presentation, pointed out that Greece has already achieved the goal of reducing natural gas consumption by 15% thanks to the large increase of RES in our energy mix which this year will add over 1700 MW, and added that the electricity production from lignite has doubled from 10% to 20%. Also, the Greek minister referred to the possibility of switching the operation of the five dual-fuel units from natural gas to diesel, as well as doubling the storage capacity at the Revythoussa LNG station, with the addition of a floating tank in record time.

In addition, he noted that the Greek government will introduce incentives to reduce household electricity consumption by granting higher subsidies when a 10% reduction is achieved. Similar incentives are being considered to be established for businesses as well, as announced. The Greek minister announced the signing of a Memorandum of Understanding with his Italian counterpart for the storage of 1.5 TWh of natural gas in Italy, a quantity that can be transferred to Greece through reverse flow. He then explained to his counterparts the mechanism for recovering excess revenues from electricity producers, which has been implemented since July 7 in Greece, and which has generated over 1.5 billion euros in the first two months of its operation.

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