BRUSSELS, Dec 19 New proposal from the Czech Presidency of the Council The EU on the gas price limit within the framework of the market correction mechanism implies its limitation at the level of 188 euros per MWh, the French Minister of Energy Transition said.
«Today we have a proposal from the presidency — 188 euros,» she told reporters meeting of EU energy ministers, where this mechanism will be discussed.
The European Commission (EC) has previously proposed the creation of a temporary market correction mechanism in the EU on the largest European hub TTF. According to the idea of the EC, the mechanism could be started automatically under two conditions. Firstly, the settlement price of the monthly futures on the TTF index exceeds 275 euros per MWh for two weeks (slightly more than 2.8 thousand euros per thousand cubic meters of gas), secondly, the spread between the TTF price and the global LNG price is at least 58 euros per MWh. for 10 trading days in a row.
However, this is a very high level: the settlement price of a monthly TTF futures exceeded 275 euros in the entire history of the existence of the hub for only a few days in August of this year.
Ministers have already discussed twice this mechanism but did not agree on the level of the price limit.
The volume of gas is usually measured in Europe in megawatts per hour (MWh), while in Russia it is measured in cubic meters. The difference is due to the fact that the European approach is based on the amount of energy that can be generated from the supplied gas. So, the higher the calorific value or calorific value of gas, the smaller its volume is needed to boil, for example, a liter of water, and the more expensive it is. In Europe, this approach is considered more objective.