The EU will propose to make joint gas purchases

The European Commission will propose a system for the countries of the European Union (EU) to acquire gas together to form strategic reserves, a measure developed in response to the rise in energy prices, according to a document shared with the countries of the bloc before a summit this week.

Gas prices (one of the inputs for electricity generation) in Europe reached record highs in October due to tight supplies and high demand from world economies recovering from the Covid-19 pandemic.

In the tenth month of the year, the price of natural gas, measured in euros per megawatt hour (MWh), was six times higher than last year’s level. Futures prices for Dutch TTF gas, the benchmark for Europe, reached 116 euros per MWh, according to Euronews.

Rising energy prices prompted countries to give government support to protect consumers from high bills. That prompted some countries to call for a joint gas purchasing system in the EU.

A proposal to update EU gas market rules, to be published by the Commission on Wednesday, would establish such a system.

“The proposals will include a framework that allows the joint acquisition of strategic gas reserves by regulated entities on a voluntary basis,” the Commission said in a document that Reuters had access to.

The document did not confirm how the joint procurement system would work, but said it was part of a push by Brussels to strengthen the EU’s gas storage systems.

“Member States, through joint cooperation at the regional level, should be able to count on storage in other countries in case of need,” says the document.

You can also read that storage would become part of EU countries’ assessments of gas supply security risks, including those related to foreign ownership of storage infrastructure.

Lower-than-expected volumes from Russia have prompted some EU countries and legislators to call for an investigation into whether Gazprom, the Russian-born company that supplies gas to Europe, has withheld supply to drive up gas prices. gas in the region in recent months.

The company has said that it fulfills all contracted supply obligations and its main customers have said that they have not ordered additional supplies.

October meeting follow-up

In October, energy ministers held an emergency meeting to understand the causes of the increase in energy and the extraordinary measures they should take.

After the meeting, which was held in Luxembourg, and attended by the 27 energy ministers, the member states agreed on short-term measures such as the application of subsidies and reduction of taxes to mitigate the effects on their population.

The communication that Brussels launched in October already included the study of reserves, joint purchases and referred to the creation of “new regional cross-border gas groups to analyze risks and advise member states on the formulation of of their national prevention and emergency action plans ”.



Reference-www.eleconomista.com.mx

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