Due to the isolated situation, Ireland could be granted a cap on gas prices

Ireland could introduce a Spanish-style cap on gas and coal prices because energy supply here is disconnected from pipelines and infrastructure, the EU said.

Any cap expected to lower household bills would bring its own risks.

In a paper published on Wednesday, the European Commission approved in principle the introduction of limited price caps for power plants that use gas and coal to generate electricity – but only in “regions with very limited interconnection capacity”.

The caps now in place in Spain determine how much utilities there pay their suppliers for gas and coal, with the intention of lowering consumer bills.

The commission warned on Wednesday that price caps – when combined with subsidies for energy suppliers – can result in higher demand, more pollution and “significant costs” for the state.

An EU official checked Ireland and Cyprus as the only two countries in the bloc without mainland connections to Europe’s electricity grid, suggesting a gas price cap could sound the all-clear here.

The EU is looking for ways to reduce dependence on Russian gas while protecting consumers as much as possible from rising prices. She advises consumers to turn down their heating and air conditioning and limit car trips to “take money out of Putin’s pocket”.

The move is part of a wide-ranging package of measures designed to protect the bloc as it weans itself from Russian energy.

It includes a €300 billion renewable energy investment package, a higher renewable energy target by 2030, mandatory solar panels for industrial buildings by 2025 and an attempt to reduce the time it takes to get green project permits.

“It is more urgent than ever that Europe becomes master of its own destiny,” said EU Vice-President Frans Timmermans.

“Every year, 100 billion euros goes into Putin’s pockets for the fossil fuels we buy there.

“If we can really speed up the transition from that, this money can stay in Europe, can help lower energy bills for European families, and will not be used to fund this barbaric war in Ukraine.”

Brussels will give its final approval to a move by Spain and Portugal to limit the cost of natural gas and coal for power plants to between €40 and €50 per megawatt hour for 12 months.

Although such moves come with conditions.

“Member States that choose to introduce such measures are encouraged to consult, inter alia, affected neighbors and stakeholders and to identify and monitor the additional gas consumption and increased CO2 emissions as a result of the intervention,” the commission said in a paper.

Many consumer contracts in Spain are tied to wholesale gas prices or what energy producers charge utilities. These prices have increased more than sixfold in the last year.

Spain has the bloc’s largest liquefied natural gas (LNG) resources, which it can tap in the event of a gas and coal supply crisis.

The Commission has also touted an EU-wide gas price cap in the event of a complete halt to Russian gas supplies.

The move is intended to largely shield Eastern European countries, most of which are completely dependent on Russian energy.

Last month, Russian energy giant Gazprom halted exports to Poland and Bulgaria over its refusal to pay in rubles.