“Check against delivery”
Thank you, good evening.
I will start by thanking you, Jozef, and your team for steering the work over the last weeks on the market correction mechanism.
This was a long and intense Council meeting, with substantial political discussion on a very complex and sensitive proposal.
The Commission proposed a type of market intervention that was never done before. We believe it is a necessary mechanism to deal with an unprecedented situation on EU energy markets due to the war in Ukraine.
We knew that reaching an agreement on this topic was never going to be easy.
Over the past weeks of intense negotiations, we have made progress on technical aspects. We’ve been able to better define the logic of a market correction mechanism and identify its risks, but also to identify appropriate safeguards to reduce these risks to the minimum.
Everyone, today, showed a genuine willingness to arrive at a compromise and agree on this proposal and on the other open crisis initiatives on the table.
The Council made progress on a number of aspects of the proposal, thanks to the energy and leadership of the Presidency. There is a common ground on most aspects of the scope, increasing the financial derivatives from one month to one year, that over-the-counter will be initially excluded from the scope, but will be subject to a comprehensive review. On sub and regional hubs, we also discussed.
Where we need more time to discuss is on the triggering thresholds and the numbers. Despite the skillful efforts of the Presidency, there are still different views on this aspect of the proposal:
The Presidency has proposed that the market correction event will be triggered when prices reach a certain level and the spread between TTF and global prices is above 35 euro per MWh, for three days. The safety ceiling will then be dynamic and will fluctuate above a certain level.
This point is left open for discussion at the next Council that takes place next Monday.
As you know, in the Commission’s view, the mechanism serves as a tool to prevent episodes of excessive prices like we saw this August. And it should not be a tool for structural measure to regulate prices on the EU market.
There is a very good progress today, we have made a proposal on which to a large extent Ministers can find an agreement, but of course not everything could be closed today. Clearly, this is now not the end of the negotiations. We will continue to support the Presidency in view of the next meeting of the Energy Council.
My last comment is on the broader context. We are in a relatively safe position for this winter. But yesterday’s report from the International Energy Agency is a reminder that Europe is not out of the danger zone and that next year may be more difficult than this one.
We have made a lot of progress this year, through the storage regulation, the coordinated demand reduction, the Regulation on maximum revenue limits for inframarginal generators and electricity demand reduction.
We need to continue deliver the actions needed to strengthen our crisis management. A market correction mechanism would be a valuable protection against possible damaging price spikes next year.
And at the same time, we need to move forward on the other pending proposals, making joint purchase of gas a reality, accelerating permitting, creating a new complementary LNG benchmark and reinforcing our energy solidarity.
We have worked intensively this year to respond to an unforeseen, complex and difficult crisis. We need to take, together, one more step and agree on all these proposals before Christmas. I trust the Czech Presidency will manage to accommodate this compromise to reach the broadest possible support among Member States.