An extraordinary meeting of the European Union Ministerial Council for Energy took place in Brussels on November 24, where the ministers agreed on the content of two new legislative acts to strengthen the EU’s energy independence and solidarity, and exchanged preliminary opinions on the European Commission’s (EC) proposal for a mechanism to correct gas market prices. Latvia’s opinion at the meeting was expressed by the parliamentary secretary of the Ministry of Economics Andris Čuda.
During the meeting, the ministers agreed on the content of a new Regulation enhancing solidarity, which includes three dimensions. One of them is aggregation of EU natural gas demand and the implementation of joint gas procurement. In joint procurement, the EU would be able to negotiate better prices with energy suppliers, as well as reduce the risk of competition, which may contribute to tightening demand and increasing prices in the market. At the same time, the aggregation of such demand does not require the purchase of gas in a given offer. Latvia supports the introduction of this principle, as well as ensures that gas coming from Russia would not be included in the platform.
Similarly, to reduce the gas price, by March 2023 the EC is planning to establish a new benchmark for LNG prices reflecting the real gas cost price rather than the geopolitically influenced price. Latvia supports measures aimed at stabilising the gas market.
This Regulation also provides for the inclusion of default solidarity rules between Member States in the event of gas supply shortages, which will apply to countries not covered by solidarity agreements. Latvia is one of the few EU countries that already has such bilateral solidarity agreements with Estonia and Lithuania.
During the meeting, ministers also agreed on the content of another Regulation, which will lay down a framework to accelerate the deployment of renewable energy.
The Regulation provides for the introduction of temporary emergency measures, the most important of which is the introduction of an overriding principle of public interest. According to this, renewable energy projects would not have to take a number of key steps relating to environmental requirements in the authorisation process.
The Regulation also proposes that the authorisation process for solar panels may not exceed one month, while the authorisation for installing heat pumps should be granted within three months, as well as the connection to the system should be facilitated.
On the other hand, to increase the capacity of renewable energy power plants, the deadline proposed in the Regulation is one year for authorisation of projects and one month for electrical grids.
Latvia supports the purpose of the Regulation to promote the introduction of renewable energy technologies and projects, which are key elements for strengthening energy independence and reducing energy prices. Latvia therefore generally supports the measures provided for in the Regulation in relation to the acceleration of the authorisation of RES. Considering the proportion of the Latvian RES and the ability of the system to accept the requested capacities, it is important that the Regulation stipulates that the measures to be implemented cannot jeopardise the safety and stability of the electrical grid infrastructure.
At the end of the meeting, the Ministers of the Member States exchanged opinions on the EC proposal for the introduction of a gas market correction mechanism. Several ministers, including Latvia, expressed concern about the possible impact of the mechanism proposed by the EC on the security of supply. In the coming weeks, active work is needed to clarify the specific parameters of the proposal to ensure that it is effective and addresses price problems. The proposal is expected to be approved at the next Council meeting in mid-December.
As part of the meeting, the Ukrainian Energy Minister German Galushchenko informed ministers about the situation in Ukraine’s energy supply.