Greece proposes a six-point plan to stabilize the European energy market

By Giulia Petroni

The Greek government unveiled a six-point plan to stabilize the wholesale gas market in Europe on Wednesday in a letter sent to European Commission President Ursula von der Leyen, according to Greek Prime Minister Kyriakos Mitsotakis.

The proposed plan, described by Mr Mitsotakis in an opinion piece on the Politico news outlet, includes a price cap on the title transfer facility, or TTF, prices, the European regional benchmark for gas and guards. daily bodies to limit volatility on the fluctuation band on TTF. .

It also provides for the setting of a fixed price as an emergency response to statements about gas pipeline flows from Russia, as well as a profit cap on gross margins. In wholesale electricity markets, for example, this could be a 5% cap based on the control of generation costs and generation assets by market regulators.

The objective of this plan is to curb energy price increases weighing on consumer bills and to remedy the disruption of supply caused by the war in Ukraine. “Natural gas has become a major factor in the power struggle between Russia and the European Union,” Mitsotakis said. “This spiral of speculation and politicized price hikes must stop. When markets stop functioning normally, it is the obligation of governments and regulators to step in and ensure the market can reset and rebalance.”

The plan also includes examining a time-limited option to only allow trades with physical delivery to avoid market manipulation, and increasing natural gas market liquidity through market coupling between the EU, USA and Asia.

On Tuesday, the European Commission announced plans to store more natural gas and add more renewable energy sources as part of a plan to cut the bloc’s dependence on imports by two-thirds of Russian gas by the end of the year. According to the EU, the plan could end members’ dependence on Russian gas entirely before 2030.

Write to Giulia Petroni at giulia.petroni@wsj.com

Mary I. Bruner