Irish diplomats are hoping the UK rejoins the North Seas Energy Co-operation Agreement after a meeting between Jacob Rees-Mogg and his counterpart Eamon Ryan on Monday. Ireland is highly dependent on the UK for gas supplies and it is “optimistic” relations with Britain would remain strong in the event of constrained supply.
But a return of the UK to the North Seas Energy Co-operation Agreement – an alliance of eight EU member states plus Norway – would reassure Ireland of sustained supplies.
The UK has left the alliance as a result of Brexit but the remaining members have said to be willing to reopen the door for London.
After the meeting, a spokeswoman for Mr Ryan said the conversation with Mr Rees-Mogg had been “constructive”.
Irish sources told The Irish Times that the meeting was “very positive” but one person familiar with the arrangements said Ireland is still worried over potential consequences of UK energy supplies being “squeezed”.
They said: “If they are squeezed, we would be proportionally affected.”
It comes as EU leaders are still locking horns on a joint solution to the energy crisis exacerbated by Russia’s invasion of Ukraine.
As Europe heads into a winter of scarce Russian gas supplies and high energy costs, EU energy ministers will meet in Prague on Wednesday to discuss their next move, having already rushed through emergency EU energy windfall profit levies, gas storage filling obligations, and electricity demand curbs.
A majority of EU states say a gas price cap should come next, but disagree on whether it should apply to all gas trades, long-term contracts, or just gas used to produce electricity.
Others, including Germany, remain opposed.
A senior EU official said Wednesday’s meeting should narrow down the options so the European Commission can propose fresh legislation this month.
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The official said: “Member states use the same words, not necessarily in the same meaning, so we need to narrow that down.”
Ministers on Wednesday will also discuss joint gas buying among countries, and the potential to negotiate lower prices with non-Russian suppliers as ways for the EU to tame energy prices.
The Czech Republic, which currently chairs meetings of EU ministers, would call an emergency energy ministers’ meeting in November to approve the proposals, the official said.
Three EU country officials agreed with that timeline, but said states still disagree on what measures to take. “It’s difficult to see consensus because everyone has their own preferences,” one said.
The senior EU official said that in their view countries were leaning towards the “Iberian model” of capping the price of gas used for power generation.
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Spain and Portugal capped the price of gas used in power generation in June, which has helped curb local power prices.
The idea has gained traction among other countries, although some worry it could raise EU gas demand, since Spain’s gas use increased under the measure.
EU energy commissioner Kadri Simson last week said Brussels could learn from the scheme, but that it was not suitable to immediately roll out Europe-wide because of local specificities including Iberia’s numerous liquefied natural gas terminals, which many EU countries lack.
Countries would also need to decide how to compensate gas plants for the gap between the capped price and the higher market price at which they buy fuel, be it through public funding or a levy on other energy generators.
“It would be really costly for many member states,” one of the officials said.