Meeting in Brussels on Thursday 15 December, the EU27 Heads of State or Government of the Member States of the European Union decided to leave it to their energy ministers to set the parameters for the gas price cap (‘market correction mechanism’), setting a deadline for their next meeting on Monday 19 December.
The European Council “invites the Council (of the EU) to finalise, on 19 December 2022, its work on (...) a Council Regulation establishing a market correction mechanism to protect citizens and the economy against excessively high prices”, state the conclusions adopted at the end of the summit.
Member States close to agreement
After ministers failed to reach agreement on the issue two days before the summit (see EUROPE 13083/11), an agreement is now reportedly within reach.
“I think we are close to an agreement”, said Belgian Prime Minister Alexander De Croo, but he warned against claiming victory too soon.
“We have defined the political framework for finalising discussions on capping gas prices on 19 December”, said French President Emmanuel Macron.
Agreeing with them, German Chancellor Olaf Scholz said he was “very confident that we will reach a final agreement”.
The level of the cap is becoming clearer
Although no figure for the level of the cap was mentioned during the meeting, the EU27 did discuss it in private, said Olaf Scholz.
According to one source, Germany is ready to accept a cap of €200/MWh, while the Spanish are arguing for a cap of €160. These figures are in line with information from two other sources that predict a landing zone of between €180 and €200.
Preparing for coming winters
In order to prepare for the coming winters, the EU27 call for further work on several aspects: - the speedy operationalisation of gas demand aggregation and of the joint purchasing mechanism through the EU Energy Platform, to strengthen the Union’s negotiating leverage with gas suppliers; - accelerating discussions with reliable partners to conclude long-term gas delivery contracts; - filling of EU’s gas storage; - close monitoring of gas demand reduction objectives; - the early preparation of contingency plans for winter 2023/2024.
Electricity market reform
The conclusions further underline that the European Council “looks forward to the proposal and impact assessment on the structural reform of the EU’s electricity market, including on the effect of gas prices on electricity prices”.
This proposal, expected in the first quarter of 2023, aims to make the market “fully fit for a decarbonised energy system and facilitating the uptake of renewable energy”.
See the European Council conclusions: https://aeur.eu/f/4pd (Original version in French by Damien Genicot with the editorial staff)