Ceiling on the European gas exchange. Proposal “does not serve Portugal”
“The proposal is not for Portugal. We made clear what our arguments and suggestions were for improvements, as other countries have done”. This is the position of the Secretary of State for the Environment and Energy, João Galamba, on the European Commission’s proposal for a price ceiling on the main European natural gas exchange.
At the end of an extraordinary meeting of the relevant ministers, in Brussels, Galamba also justified that “Portugal’s position is that the Commission’s proposal mixes two themes that should not be mixed: mixing the dysfunctionality of an index when compared to other indices, namely liquefied natural gas [GNL]and another theme at the level of gas prices”.
He added: “Dysfunctionality in the TTF index [a principal bolsa europeia de gás natural]when detected with other indices, it should not make reference to absolute price values because market dysfunctionality can either exist with low, medium or high prices and, therefore, Portugal’s position is that we should separate the themes”.
Therefore, the Portuguese Secretary of State defended that it is necessary to “continue to work on a proposal” until the next meeting, since the positions between the countries are still “quite divergent”.
It should be recalled that the European energy ministers were present this Thursday and reached an agreement, albeit informal, on joint purchases of gas and reinforcement of solidarity. However, this agreement will have to be approved in an extraordinary council that will be held next month.
At issue is a “last resort measure” that aims to address situations of excessive natural gas prices and that will establish a maximum dynamic price at which natural gas transactions can take place one month in advance on the TTF markets, which is Europe’s leading natural gas exchange.
Continuity of the Iberian mechanism Galamba also said that the Government is “evaluating” with Brussels the continuity of the Iberian mechanism, which limits the price of gas in electricity production. “When we approved our mechanism, it was approved for two reasons: because there was no European mechanism and because the Iberian Peninsula was an energy island and had weak interconnections. As the context has changed, we obviously have to update our arguments in the face of the new context”, said the Secretary of State, adding that the Government “likes the Iberian mechanism” defending that it works. “So everything indicates that it will continue, but that decision has not yet been made”, he said.
It should be remembered that this is a temporary mechanism that joins Portugal and Spain and that aims to control the effects of the natural gas acquisition price on the prices practiced by the final electricity suppliers.