Dainius Kreivys: mere talk about the “ceiling” of gas prices contributes to the fall of these prices | Business

Dainius Kreivys: mere talk about the “ceiling” of gas prices contributes to the fall of these prices | Business
Dainius Kreivys: mere talk about the “ceiling” of gas prices contributes to the fall of these prices | Business

D. Kreivys said that applying the gas price ceiling to transactions on the Dutch TTF exchange would lead to lower prices for gas intended for electricity production.

“If we adapt the TTF, it will also automatically adapt to the gas used for electricity generation. Of course, there are certain trades that are not traded on an exchange. There are a few of them, but basically, if we limit the size of the TTF, then the overall price that is in the market will react and will definitely be lower. Talks about the ceiling alone push the price down,” the minister told reporters.

However, he said that Lithuania, like a number of other bloc countries, is not satisfied with the high gas price ceiling of 275 euros/MWh proposed by the EC. In addition, for the mechanism to take effect, the second condition must be met: the difference between the price of the stock exchange and liquefied natural gas (LNG) should exceed 58 euros/MWh for 10 consecutive days.

“I did not name a specific number. Some of the member countries say that the price should be lower than 200 euros/MWh, between 150-180 euros/MWh. My statement was very clear – the prices as they were in August [neturėtų] to repeat The price should probably be lower than 200 euros,” said D. Kreivys.

On the TTF platform, the price of wholesale gas in Europe reached around 124 euros on Thursday. The only time it exceeded the €275 mark was one week in August, when the impact of the war on the market and the EU’s need to fill gas storage were at their highest.

At the meeting, such EC proposal received strong criticism from many EU member states, including Lithuania.

Commenting on the new legislative proposal, the Minister of Energy named several conditions under which the mechanism proposed by the European Commission could have a real impact. “First, the proposed gas price ceiling should not be such that the gas price spikes of August do not repeat themselves. When setting gas price ceilings, it is also necessary to take into account gas prices in other international markets. Secondly, the mechanism should start working automatically after reaching the set limit and without waiting for additional actions and decisions of the European Commission or other EU institutions. Third, they should be applied at least until 2023-2024. the end of the heating season”, said D. Kreivys at the ministerial meeting.

He also emphasized that it is necessary to reach a final agreement this year. “The prices of energy resources in the markets have slightly decreased, but this is not a reason to relax. We must have instruments that will protect us from a similar energy price shock in the future, as we experienced in August of this year”, emphasized the minister.

In order to reduce the increased energy prices and the financial burden on society and industry, at the TTE meeting the ministers reached a common understanding in principle on strengthening solidarity measures to ensure gas supply to vulnerable customers such as households, district heating and basic social services, as well as gas-fired power plants when there is a shortage of them in neighboring countries, as well as by better coordinating joint gas purchases and aggregating gas demand, thus aiming to increase the purchasing power of EU member states and self-sufficiency in natural gas reserves.

In principle, the Council also reached a common understanding on measures aimed at speeding up and simplifying the issuance of permits required for the development of RES. According to the International Energy Agency, this could replace about 14 billion m3 of Russian gas consumption in the EU already next year.

The legislative proposal includes general measures such as the recognition of RES projects as meeting the overriding public interest, simplification of the issuance of permits for the renewal of RES power plants, and measures applicable to specific technologies, such as significantly shorter and faster issuance of permits for solar energy equipment on existing structures, small-scale solar promoting and speeding up the installation of energy devices intended for producing consumers, as well as determining the conditions for the installation of heat pumps.

The proposed plan to cap gas prices is seen as “neutralized” due to pressure from some members, including Germany and the Netherlands, who worry that gas producers could divert gas supplies to more profitable markets, especially Asia, according to the BNS news agency.

However, at least 15 EU countries want the bloc to introduce a gas price ceiling.

The next extraordinary meeting of the TTE is scheduled for December 13. During it, the agreement of the ministers on the price correction mechanism will be sought, which will be approved together with the measures for strengthening solidarity, coordinating the purchase of common gas, exchanging gas on a cross-border scale and accelerating the development of RES.

In the next two weeks, negotiations on the price adjustment mechanism will continue in the formats of the EU Council.

The article is in Lithuanian

Tags: Dainius Kreivys mere talk ceiling gas prices contributes fall prices Business

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