Energy crisis: Gas in Europe is cheaper than it has been since July

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Gas flame on a stove

Photo: Angelika Warmuth / picture alliance / dpa

The price of European natural gas fell to its lowest level since late July on Monday.

In the morning, the price of the TTF futures contract for Dutch natural gas fell by almost eight percent to around 189 euros per megawatt hour.

The TTF contract serves as a guideline for the European price level.

A week ago, the gas price had skyrocketed towards 300 euros due to the temporary stop in deliveries via the important Nord Stream 1 pipeline.

Gazprom gave technical problems as the reason for the delivery stop.

However, it is assumed that Russia wants to put even more pressure on the West in the conflict over Ukraine.

According to a report by the Bloomberg news agency, the EU Commission now wants to oblige member states to reduce their electricity requirements.

The agency relies on a draft available to it.

In order to reduce electricity consumption, targets should be set both for reducing overall use and for selected peak times.

Low electricity consumption would also dampen demand for natural gas.

In addition, the Commission wants to skim off the profits of energy companies.

The commission will propose the measures this week, according to Bloomberg.

However, the member countries must agree.

According to this, energy companies from the oil, gas, coal and refinery sectors in the EU could have to pay a special levy on their recently drastically increased profits at the turn of the year.

According to the draft, the money should be used, among other things, to relieve consumers and energy-intensive industries.

According to the preliminary paper, the contribution is to be paid retrospectively on the profits of the fiscal year 2022.

EU proposals for electricity and gas by the end of the week

Last week, the energy ministers of the EU states commissioned the EU Commission to implement their emergency plan with a series of measures against the high electricity prices in legal form.

There are also gaps in the paper when it comes to skimming off excessive profits from certain electricity producers.

Unlike the solidarity levy for fossil energy, this is about companies that produce electricity from cheaper sources than gas - such as wind, sun or nuclear power.

They are supposed to give up their proceeds from a certain price per megawatt hour.

The upper limit should apply in all EU countries – but its amount is still open.

In previous drafts, the revenue cap was 200 euros per megawatt hour.

The background to this is that many producers are making particularly high profits because of the very high gas prices, on which the overall electricity price is currently based.

These should be skimmed off and redistributed to consumers regardless of the trading venue or the transaction period.

The draft also provides that the state can temporarily cap electricity prices for end customers not only for consumers but also for small and medium-sized companies.

The various measures should initially only apply until the end of March 2023, as the draft shows.

mamk/dpa-AFX