LEAK: EU countries urged to prepare for Russian gas ‘supply shock’

(EurActiv, 16 May 2022) In a policy document due to be adopted on Wednesday (18 May), the European Commission urges EU member states to step up preparations for a “full disruption of Russian gas supplies” by considering emergency measures like a temporary cap on gas prices.

After Russia cut off gas supplies to Poland and Bulgaria in April, the Commission is asking EU member states to prepare for a full scale “supply shock”.

Natural gas has been trading at around €100/MWh since mid-March, a seven-fold increase compared to long-time average prices, with occasional peaks at €200/MWh, caused mainly by a shortage of supplies from Russia. This has led to an increase in electricity prices, largely determined by backup power generation from gas-fired powered plants.

And while previous measures adopted in the Autumn were calibrated to address a situation of sustained high gas prices, “a different set of measures may become worth considering in the event of a sudden large scale or even full disruption of the supplies of Russian gas leading to unbearably high gas prices and inadequate supply of gas,” the EU executive says in the draft policy document.

First among the new measures envisaged in Brussels is a direct market intervention with “a maximum regulated price for natural gas delivered to European consumers and companies (EU price cap),” says the draft obtained by EURACTIV.

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EurActiv, 16 May 2022: LEAK: EU countries urged to prepare for Russian gas ‘supply shock’