This week, following long discussions at another meeting of the European Union Ministerial Council for Energy, Member States agreed on a price cap on wholesale natural gas.
After several rounds of negotiations, responsible energy ministers agreed on a wholesale price threshold on the Dutch Title Transfer Facility (TTF) exchange, which kicks off when the price reaches 180 euros per megawatt-hour (MWh) and becomes 35 euros higher than the comparable price of liquefied natural gas on global markets in three days. The market correction mechanism will become operational as of 15 February 2023. At the same time, the correction mechanism for the natural gas market is expected to extend to other EU exchanges.
On November 23, the European Commission proposed a price cap on wholesale natural gas on the TTF exchange at EUR 275 per MWh, however, EU’s responsible energy ministers did not reach an agreement on the proposal. The only time when TTF natural gas price exceeded the limit of 275 euro from August 22 to 29, was when demand for natural gas was high, including due to the efforts of EU countries to fill natural gas storage facilities.
At the meeting, the ministers also approved the general approach to the Regulation on reducing methane emissions in the energy sector, which aims to track and reduce methane emissions in the energy sector and is an important contribution to climate action. Trilogues with the European Parliament for the approval of the new regulation are expected during the forthcoming Swedish Presidency.
At the same time, energy ministers approved the RePower EU proposal, which introduces amendments to the Renewable Energy Directive, providing for the setting of a 40% RES target at the EU level, as well as a simplified authorisation procedure process. This Regulation will set a framework for accelerating the use of renewable energy. The Regulation provides for the introduction of temporary emergency measures, for example, simplification of procedures relating to environmental requirements for renewable energy projects. Similarly, the authorisation process for solar panels will take up to one month, and for installation of heat pumps – up to three months, including other aspects.
Latvia’s position in the EU Ministerial Council for Energy was expressed by the Minister of Climate and Energy Raimonds Čudars.