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Brussels has proposed setting a cap on gas prices in the main European market, the Dutch TTF

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The goal is the Dutch TTF. The wholesale market that decisively influences gas prices in the rest of Europe, as it is not able to set an adequate price for, among other things, liquefied natural gas, which is increasingly disconnected in the EU. From Russian gas.

The European Commission has distributed a proposal in the form of a draft on a temporary mechanism among 27 people, lasting up to a year, to prevent price increases in the main European market, meaning with contagion effects.

“The proposed mechanism essentially includes a security limit for the price of TTF derivatives one month in advance (TTF price), which plays an important role as a reference price in the European wholesale gas market,” the document says. European Commission: “The ceiling is triggered if the TTF price base reaches a predetermined level and the price increase does not match the same increase at the world market level (compared to liquefied natural gas prices)”.

The Brussels text continues: “To ensure immediate results, it is proposed that the values ​​for activating the mechanism should be set in advance, to avoid a long decision-making process that could significantly delay its activation and the effect of reducing prices. “In the air”.

Indeed, the text does not establish the maximum price at which the cap will be activated.

“In view of possible changes in market conditions, and to be able to react to the possible unwanted negative effects of price caps”, says the Community Executive, “the proposal must include effective safeguards. Suspended at any moment in the event of serious market disturbances affecting the security of supply and intra-EU flows”. The price cap will be automatically deactivated if a monthly review shows that it no longer meets its activation conditions. Compliance with EU demand reduction targets should also be taken into account when assessing the effects of the mechanism.

“The Commission is working closely with Member States and is fully committed to moving forward without delay with concrete proposals for an effective market reform mechanism, fully respecting the conclusions of the European Council and the principles set out therein,” read a letter. European Commission President Ursula von der Leyen and Czech Prime Minister and current President of the EU Council Petr Fiala sent to EU leaders last Friday: “The EU must have a mechanism that will limit episodes of extreme gas prices that we experienced in August.

Thus, the Community Executive presented a detailed outline of the “Market Reform Mechanism (‘Temporary Limits on Gas Prices’) proposal that takes into account the conditions and guarantees requested by Member States, in time for ministerial discussions. At the meeting of Energy Ministers on 24 November.



Source: eldiario.es/

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