Energy ministers from the countries of the European Union meet on Friday to seek solutions to a long list of possible measures to protect citizens from high energy prices as winter approaches.
The basis for the talks is a set of proposals formulated by the President of the European Commission, Ursula von der Leyen, among which are a price cap for Russian gas, a tax on power plants that do not use gas, a block-wide electricity demand cuts and emergency lines of credit for power companies facing increased collateral requirements.
EU diplomats said countries appeared broadly supportive of measures to provide companies with liquidity, and some had also supported reducing electricity demand.
Other proposals were more controversial. Capping Russian gas prices has so far not garnered support from most countries, with some wondering how it could help curb prices given the low volumes of gas Moscow now sends to Europe.
“Our intention is first and foremost to lower prices. A cap on Russian gas alone will not lower prices,” Belgian Energy Minister Tinne Van der Straeten told GLM.
The Baltic countries are among those who support the idea, arguing that a price cap would continue to deprive Moscow of revenue to finance military activities in Ukraine.
President Vladimir Putin said Wednesday that Russia will stop supplying gas to Europe if it imposes a price cap. Support for this measure is scant among the Central and Eastern European states, which are unwilling to lose the meager supplies they still receive.
Russian gas supplies via the three main routes to Europe have fallen by almost 90% in the past 12 months, according to Refinitiv data. Moscow has blamed the supply cuts on technical problems caused by Western sanctions due to its invasion of Ukraine.
EU countries are not expected to approve any measures on Friday, but instead give a signal to Brussels on which options have enough support to become final proposals. EU emergency laws are usually approved by most countries, although some may require unanimous approval.
The idea of capturing revenue from non-gas electricity generators and putting the money toward lowering consumers’ bills has also met with resistance in some capitals.
The EU proposal would cap the price paid to non-gas-fired generators at 200 euros ($199.86) per megawatt-hour, and would apply to wind, nuclear and coal-fired generators, according to a draft accessed by GLM.
Energy prices in Europe are typically set by gas plants, and the cap would aim to reduce the cost of electricity produced by plants that are not exposed to skyrocketing gas prices in Europe, which last month reached 12 times its level at the beginning of 2021.
France, which is home to Europe’s largest nuclear park, questioned applying the same limit to all generators.
“The fact of having a single revenue ceiling for all forms of energy production and all EU countries is something that we are questioning,” a French energy ministry source said.
The source said Paris supported an EU price cap on Russian pipeline gas, but warned that capping liquefied natural gas prices could see the EU lose much-needed supply to other countries.
An EU diplomat from one country said a “large group” of states were seeking some kind of cap on energy prices to reduce bills, with a price on gas used to produce power and a cap on the whole of block on all gas imports among the ideas under discussion.
“The question is what is limited and how it is limited. This is what is in the details,” the diplomat said.