European ministers will discuss non-standard measures to stem rising energy costs, from price caps on natural gas to the suspension of power derivatives trading, as the bloc tries to respond to the deepening crisis.
The Czech Republic, which holds the rotating presidency of the European Union, will include these tools in a list of emergency intervention options to be discussed at a meeting of energy ministers on Friday, according to a draft document seen by Bloomberg News.
Europe is struggling to avert an energy catastrophe that threatens to become an economic, social and even financial crisis. Nordic authorities took action this weekend to bolster liquidity for utilities struggling with collateral requirements, saying there was a risk of a “Lehman” moment.
European leaders have been working for months to offset the effects of Russia’s gas pressure – a move they call energy weaponization. But Gazprom PJSC’s decision late Friday to keep the vital Nord Stream pipeline closed brought a new sense of urgency.
Russia’s move to halt supplies will push natural gas prices to record highs in Europe and Asia, further increasing pressure on power producers. Energy suppliers in Asia stepped up efforts to secure supplies of liquefied natural gas as early as Monday, traders said, intensifying competition with rivals in Europe for a dwindling supply of fuel that threatens to push up prices.
The worsening energy crisis in Europe is putting further pressure on the euro, which fell 0.5 percent to 99.04 cents on Monday. That’s just above the August low of 99.01 cents — the weakest since December 2002.
Over the weekend, Germany — the country hardest hit by the Nord Stream shutdown — unveiled a $65 billion consumer protection package that includes a levy on windfall profits. Thousands of Czechs protesting in the streets this weekend were a reminder of the social and political risks.
“It is clear that the upcoming heating season will test the resilience of the EU energy market,” the Czech Presidency plans to tell member states according to the draft document for the emergency meeting. “It is crucial to take stock of market developments and identify possible measures to address the high electricity prices caused by high gas prices.”
The options that the Czech presidency will propose would complement measures outlined by the European Commission in a policy note shared with Bloomberg last week. These included a reduction in electricity demand and price caps on renewable energy, nuclear power and coal. The Presidency stands ready to propose similar solutions in the energy sector and to launch the following additional instruments:
The Czech Presidency will also propose an assessment of how the EU could use its carbon market to address high electricity prices and ensure quick agreement on a Commission proposal earlier this year to sell some allowances withdrawn from the market and held in a special reserve. Such sales would increase the supply of carbon credits and help lower their prices.
The planned intervention should be designed to avoid increasing gas consumption or jeopardizing efforts to reduce gas demand. It should be easy to implement and coordinate across the bloc and be consistent with the bloc’s climate goals, the presidency said in the draft document.
https://www.independent.ie/business/world/eu-to-consider-special-interventions-as-power-crisis-worsens-41961233.html EU considers special measures if power crisis worsens