Brussels cautions against EU-wide gas price cap for electricity

(EurActiv, 25 Oct 2022) The European Commission has warned countries that an EU-wide cap on the price of gas used to produce electricity could cause an increase in gas use and exports of EU-subsidised electricity, according to a document seen by Reuters.

European Union countries’ energy ministers meet on Tuesday (25 October) to discuss options to cap EU gas prices, with countries still split over whether and how to do this after discussing it for weeks.

The document shows that the Commission shared with countries an analysis of a price cap for gas used to produce power – a scheme that Spain and Portugal launched this summer after Russia’s invasion of Ukraine and subsequent cuts to EU gas supplies pushed up energy costs.

Rolling this out EU-wide – an idea France has championed – could see gas EU demand rise by up to 9 billion cubic metres (bcm), the document said.

It would also require measures to prevent the resulting cheaper electricity from flowing to non-EU countries like Britain and Switzerland that do not have the price cap, the document said.

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EurActiv, 25 Oct 2022: Brussels cautions against EU-wide gas price cap for electricity