Minister Kreivys in Prague: EC must take essential measures as soon as possible to address the energy crisis

Date

2022 10 13

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“When talking about imposing a price cap on gas, we have to be more ambitious and temporarily set a price cap not only on gas used for electricity generation, but also on all wholesale natural gas transactions,” stated Minister of Energy Dainius Kreivys at an informal meeting of European Union energy ministers that took place in Prague yesterday and today. 

At the meeting, the ministers discussed further measures to reduce energy prices and mitigate the current crisis.  

Minister Kreivys emphasised that this position – a temporary price cap on all wholesale natural gas transactions – was already expressed by another 14 EU member states in a letter sent to the European Commission (EC) in September. 

According to the minister, the current EC proposal to set a price cap on gas used for electricity generation would ensure the production of electricity at affordable prices and reduce consumers’ energy costs. However, the proposal supported by Lithuania to temporarily set a price cap on all wholesale gas transactions would prevent the recent speculations in the gas market, avoiding risks related to gas demand and security of supply. “Lithuania is calling on the Commission to present a proposal as soon as possible for legislation on a temporary gas price cap so that it can be implemented before the beginning of this winter. This should be our main priority, that we should devote the most attention to in the coming weeks,” said the minister at the meeting.

As the minister also announced at the meeting, Lithuania is successfully implementing the EU regulation on reducing gas demand. This year, Lithuania’s gas consumption is planned to be 25 per cent less than last year.

In his speech, Minister Kreivys spoke positively about the solutions proposed by the EC: the creation of a new EU price index that would better reflect the current European energy reality and ensure a better functioning market; a platform for the common purchase of gas that would help avoid competition between individual EU member states in the gas market and thus not increase prices; and additional investments in the missing infrastructure in order to remove obstacles to the smooth supply of natural gas. However, the minister emphasised that proper implementation of the proposed measures may take a long time, so he also called on the EC to look for smart and effective solutions that – most importantly – can be implemented quickly.

The EC has announced that it plans to present an additional legislative proposal next week to address the issue of energy prices. A political discussion of ministers is planned to take place on 25 October regarding the measures proposed in this legislation. The measures are expected to be approved at an extraordinary meeting of EU energy ministers in mid-November.

In the session dedicated to discussing the structural review of a potential internal electricity market, Minister Kreivys said that Lithuania advocates reform of the electricity market. “We should find solutions to protect electricity prices from the extremes that we are currently seeing in the natural gas market,” said the minister. Among the proposals mentioned, Lithuania also suggests reviewing regulation of the adequacy of the power system and changing the ERAA (European Resource Adequacy Assessment) methodology to take into account countries’ exclusive energy dependence on imports as well as the reliability of energy sources and supplies. If necessary, this would help ensure uninterrupted and sufficient cross-border energy supply.