All proposals move around the ceiling on the price of energy. – The proposal that has the most acceptance so far
Putin is intensifying the war of nerves in Europe. Gazprom has completely shut off the Nord Stream 1 taps for all of Germany and terminated a contract with a French company, sparking a new round of concerns about winter energy sufficiency.
European governments are already on alert, frantically looking for measures to lower prices and keep Europe’s lights on. They realize that we are entering uncharted waters and signal tectonic changes that were unimaginable a few months ago.
Moscow is tightening the noose in the attempted energy strangulation of Europe, closing the Nord Stream 1 tap for 72 hours since last midnight.
“Extraction is suspended from 04:00 Moscow time on August 31 until 04:00 Moscow time on September 3 due to repair of the only gas pumping unit that remains in operation,” Gazprom said.
With the question mark of whether the flow will return to hovering menacingly, the fact of the gas cut at the French Engie also leaves no room for other interpretations.
“It is forbidden to deliver natural gas to a foreign buyer who has not made a payment within the specified period provided for in the contract,” Gazprom underlined.
“As we expected, Russia is using gas as a weapon of war and is using the way Engie’s contracts are implemented as a pretext to further reduce supplies to France,” said French Energy Minister Agnes Panier Rinasse.
The Kremlin is blackmailing and perhaps playing its tricks.
“Russia has a very clear strategy. The strategy and goal is to get people out into the streets to protest against high electricity prices, high energy prices and lack of energy,” noted Columbia University researcher Christophe Rowell.
Of course, none of this applies to the representative of the Kremlin. It’s just a matter of penalties and pipeline maintenance.
“Our country and Gazprom were and remain bound by obligations, contracts, but now they simply cannot implement them because of these restrictions, because of these sanctions that the European Union, Great Britain and other countries have imposed,” Kremlin spokesman Dmitry Peskov said.
The Prime Minister of Poland, a country in which no drop of Russian natural gas has flowed for months, is not mincing his words.
“The real price for cheap gas, cheap energy – some people would hope for that – is the blood of Ukraine and this is the challenge of our time,” said Polish Prime Minister Mateusz Morawiecki.
In this setting, Europe is eagerly looking for solutions to de-dependency on Russian energy, while dealing with the price and supply crisis.
“We cannot rely on partnerships with authoritarian states to supply products and energy that are critical to the security of our nations and our citizens,” said Finnish Prime Minister Sanna Marin.
Natural gas prices today show huge fluctuations. They reached 280 euros per megawatt-hour in the morning and then retreated up to 232 euros. Such a day last year was 28 euros.
What scenarios are on the table?
Olaf Solz in a press conference said today that decisions will be made sooner than usual while Ursula von der Leyen made a marathon of contacts with the leaders of countries such as Denmark, Ireland, Poland and also with the Baltic countries that were strongly opposed to any discussion on a cap or intervention in the electricity market. But now they are ready to listen or even agree to all these decisions that are being prepared.
All proposals move around the ceiling on the price of energy. There is the Greek proposal sent by the Minister of Energy, Costas Skrekas, to all 26 partners in the EU which, among other things, describes the mechanism that has been applied for 2 months in Greece to recover excess revenues from energy production and 900 million euros have been saved. The other proposal is the Italian one, the Draghi proposal that talks about a ceiling on the price of natural gas imported from Russia to Europe. This is met with the most resistance due to the fear that Russia may react with the argument of violating the terms of the contract with Gazprom and completely stop the flow of natural gas. The most widely accepted proposal so far is the Spanish model that has been implemented and applies a cap on the price of natural gas used to generate electricity. However, this also raises questions.
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