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EU proposes maximum gas price at 275 euros per MWh-

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 A European gas price cap of 275 euros US 283 per megawatt hour MWh has been proposed Energy Commissioner Kadri Simson announced Tuesday in Strasbourg France We propose a higher ceiling on the TTF Title Transfer Facility price for next month in case it exceeds 275 euros per megawatt hour Beyond that price no transactions will be possible The market correction mechanism will be activated when two conditions are met explained the Commissioner In the first place when the price of gas exceeds 275 euros for two consecutive weeks Second when the differential between the TTF price and the global price of liquefied natural gas LNG is equal to or greater than 58 euros for ten consecutive business days When both conditions are met the mechanism will be activated automatically and will not require any additional procedure or decision Simson told a press conference that this is not a regulatory intervention to set the price in the gas market at an artificially low level rather it is a last resort solution to avoid episodes of excessively high prices that are not in line with world price trends However he added This is not a silver bullet that will drive gas prices down But it does provide a powerful tool that we can use when we need it complementing our more structural efforts to bring down prices that is controlling our demand and ensuring sufficient gas supplies for Europe through joint purchases and an active foreign energy policy The proposals will be debated by the energy ministers of the bloc s 27 member countries on November 24 However the Association of European Energy Exchanges said the mechanism poses a serious threat to the region s security of supply and financial stability and will do little to achieve the goal of lowering energy costs In August prices at the TTF virtual trading point increased from 220 to almost 320 per MWh while global LNG prices were significantly lower Since then gas prices have dropped considerably to the current 116 euros 1 euro 1 03 US dollars Xinhua
EU proposes maximum gas price at 275 euros per MWh-

Commissioner Kadri Simson

A European gas price cap of 275 euros (US$283) per megawatt hour (MWh) has been proposed, Energy Commissioner Kadri Simson announced Tuesday in Strasbourg, France.

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“We propose a higher ceiling on the TTF (Title Transfer Facility) price for next month in case it exceeds 275 euros per megawatt hour. Beyond that price, no transactions will be possible.”

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The market correction mechanism will be activated when two conditions are met, explained the Commissioner. In the first place, when the price of gas exceeds 275 euros for two consecutive weeks. Second, when the differential between the TTF price and the global price of liquefied natural gas (LNG) is equal to or greater than 58 euros for ten consecutive business days.

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When both conditions are met, the mechanism will be activated automatically and will not require any additional procedure or decision.

Simson told a press conference that this is not a regulatory intervention to set the price in the gas market at an artificially low level; rather, it is a last resort solution to avoid episodes of excessively high prices that are not in line with world price trends.

However, he added: “This is not a silver bullet that will drive gas prices down. But it does provide a powerful tool that we can use when we need it, complementing our more structural efforts to bring down prices, that is, controlling our demand and ensuring sufficient gas supplies for Europe through joint purchases and an active foreign energy policy”.

The proposals will be debated by the energy ministers of the bloc’s 27 member countries on November 24.

However, the Association of European Energy Exchanges said the mechanism poses a serious threat to the region’s security of supply and financial stability, and will do little to achieve the goal of lowering energy costs.

In August, prices at the TTF virtual trading point increased from €220 to almost €320 per MWh, while global LNG prices were significantly lower. Since then, gas prices have dropped considerably, to the current 116 euros. (1 euro = 1.03 US dollars) ■

(Xinhua)

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