Reuters
Published Sep 06, 2022 07:11AM ET
PRAGUE (Reuters) - There are two proposals in the European Union on how to set maximum prices on energy that the bloc's energy ministers will discuss on Friday, Czech Industry Minister Jozef Sikela said on Tuesday, according to CTK news agency.
Sikela said the Czechs, who hold the rotating EU presidency, were collecting member states' views on the proposals, which include either separating the high market price of gas from the prices of power plants generating electricity from gas; or setting a cap on prices charged by producers from lower-cost plants such as those using renewable sources, nuclear fuel and coal.
EU countries are scrambling to tame record-high power prices that have shot up as Russia halted most gas flows to Europe in response to sanctions and to European support for Ukraine's defence against Russia's Feb. 24 invasion.
A draft EU document, drafted by the Czech presidency and seen by Reuters on Sunday, said the ministers will consider options including a price cap on imported gas, a price cap on gas used to produce electricity, or temporarily removing gas power plants from the current EU system of setting electricity prices.
It also proposed to provide liquidity for energy market participants.
An earlier document on the European Commission's upcoming proposals said they should include a price gap for power generators that do not run on gas. They would also include an EU-wide reduction of consumption, and using revenue above the price caps to help consumers pay their bills.
The reason for soaring electricity prices is that the market price is set by the most expensive power plants running to meet demand, which at the moment are plants using expensive gas.
Sikela said separating gas prices from those of electricity could lead to higher gas consumption, which was not a problem of the second plan.
Sikela said there was an agreement on providing credit to traders to raise market liquidity. He said the presidency planned to release a summary of member states' positions on Wednesday.
He said the Czech government was working on a national solution alongside the European one.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.