REPowerEU continues in full swing across European nations

Europe: The REPowerEU campaign to decrease the European dependency on Russian fossil fuels for energy has been continuing successfully across the member nations of the European Union. The countries have united to tackle the prolonged energy crisis that arose since the Russian invasion of Ukraine in February 2022.  

Amidst the hampered supplies from Nord Stream 1 pipeline and Russia using energy as a weapon against the European nations, the European Commission launched the REPowerEU campaign.

Meanwhile, the Council of the European Union has agreed on some new measures to secure a continuous supply of energy within an affordable price range.

 As per the European Union Council, the member countries need to work together in the initiative while making sure that the countries are heavily reliant upon Russian energy, and get support and solidarity from the member nations. Thus, the European countries are working upon: 

• limiting excessively high gas prices
• improving solidarity and sharing the supply
• cutting energy costs for households and businesses
• reducing the EU’s energy dependencies
• securing gas supplies
• accelerating the green transition

Additionally, the EU countries have framed a market correction mechanism to limit the extra-ordinarily soaring prices of gas and protect the citizens from the impacts of inflation. A price ceiling will come to act automatically in case the prices of gas breach acceptable levels. The following is the correction mechanism that applies if a ‘market correction event’ occurs (both parameters apply simultaneously):

–180€/MWh –the month-ahead price on the TTF exceeds 180€/MWh for three working days

–35€ higher -the month-ahead TTF price is 35€ higher than a reference price for LNG on global markets for the same three working days

Notably, the mechanism is a temporary emergency measure and will be applicable from February 15, 2023.

Further, the EU countries have agreed on jointly purchasing the gas from international markets. This will allow the EU members to have better leverage while ruling out the factors of outbidding each other in the process. Also, a new price benchmark for stable pricing of LNG will be established, along with the execution of plans to resort to sustainable and renewable forms of energy.