The new EU gas price cap is a done deal. But what does the brake really bring to normal consumers? The answer is worrying.
Earlier in the week, the energy ministers of each EU country agreed on a gas price cap.
That’s the deal: in the EU, wholesale gas prices must be capped under certain circumstances. The cap can be triggered from a price of 180 euros per megawatt-hour and activated from February 15, 2023 (more here).
But who really benefits from this gas price cap? Johannes Reichl from the Energy Institute at Kepler University Linz said on the ORF program “Upper Austria Today”: “This is a price cap of 180 euros per megawatt-hour. That would have been the case for about 40 days this year – out of 350 days where the market price was already below that. So you can see that that price wouldn’t have been effective in many days.”
The price cap will be triggered when the price at the TTF wholesale center exceeds €180 per megawatt-hour for three consecutive days and is also €35 higher than the international price of liquefied natural gas (LNG). At the beginning of the week, the TTF price was around 110 euros, well below the defined mark.
Reichl continues: “Furthermore, 180 euros is too high a price, almost a factor of 5 of what we were used to before this crisis. You shouldn’t expect the big relief here.”
Either way, the gas price cap would bring little directly to citizens. “It benefits, first and foremost, those who buy directly from the exchange. They are big companies and also energy suppliers”, says Reichl.
End consumers would only benefit if energy suppliers were so optimistic about the price cap on exchanges that they lowered their prices as a result.
Navigation account representative Time 22.12.2022, 05:00 | Act: 12.22.2022, 05:00