The Twenty-Seven had already agreed on certain terms of the mechanism on December 13. But they had yet to agree on the price from which the cap would start. Now it’s done.
According to a statement by the European Council, EU member states on Monday approved a mechanism to cap wholesale gas prices once they exceed 180 euros per megawatt hour (MWh) for three consecutive days. A level that is well below the threshold of 275 euros originally proposed by the European Commission.
This capping mechanism, introduced after weeks of tough discussions, will only be activated from a price level that is at least 35 euros above the international average price for liquefied natural gas (LNG) in order not to endanger the European gas supply, a diplomatic source said. The mechanism is also automatically deactivated in the event of unexpected faults.
Also read: Article reserved for our gas subscribers: between lower prices and security of supply, the dilemma for Europeans
At their meeting in Brussels, European energy ministers “reached an important agreement that will protect citizens from rising energy prices, with a realistic and effective mechanism that includes the necessary guarantees for security of supply and stability of financial markets,” said the Czech minister Jozef Sikela, whose country holds the rotating EU Council Presidency.
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