European Commission Proposes TTF Gas Price Cap

The European Commission drafted a maximum price cap on the Dutch TTF hub prices and other mechanisms, to help Europe to contain the energy crisis, according to a draft document seen by Bloomberg.

• The proposal is set to be discussed by member states’ representatives on Wednesday.
• The commission is trying to find a way to limit prices while avoiding risks to security of supply and ripple effects in the internal energy market.
• The exact parameters to trigger the market correction mechanism on the TTF would be fixed upfront, according to an EC document. The mechanism could be activated if the TTF for the month and the spread between spot TTF and spot LNG prices reach certain levels.
• A majority of member states, led by Italy, Poland, Greece and Belgium, are demanding a price cap to rein in costs but nations including Germany and the Netherlands have called for caution.