Price cap gas, that’s why it risks being a flop

The European Commission has presented its proposal but the threshold is very high

The European Commission has presented its proposal for a gas price ceiling, with the hope of having it approved by the governments of the member countries by Christmas. The maximum threshold of the so-called price cap, however, is very high: 275 euros per megawatt hour. This way, according to the Italian government – backed by Spain and Poland – can be really ineffective. On the contrary: the risk is to stimulate speculation, instead of curbing it, as expected.

The price of gas, in fact, is already rising on the Amsterdam TTF market, hovering around 120-130 euros per megawatt hour. Also for this reason, the agreement between EU energy ministers on a price cap of this kind promises to be difficult.

Professor Davide Chiaroni, deputy director of Energy & Strategy, explains to that the European Union is “a small sign”, but “the probability of applying this mechanism is very low (to say nothing) compared to the past price performance.

Chiaroni himself and Massimo Nicolazzi, professor of economics of energy resources at the Turin Polytechnic, had already explained that such an intervention will avoid the price peaks seen in August (with gas at 350 euros per megawatt hour), but methane it will remain above 100 euros per megawatt hour at least for the whole of 2023 and also high in 2024. In short, the savings on bills for citizens will be very few.