A deal reached by the EU member states to impose an emergency cap on the price of gas may affect Ireland even though the country uses a different exchange to buy gas, Minister Eamon Ryan has said.
The 27 EU energy ministers clinched a deal on Monday to impose a cap, concluding weeks of talks in which the issue had divided the capitals as they sought urgent solutions to try to ease high energy costs.
Ministers agreed to a cap that would be triggered if prices exceed €180 per megawatt hour for three days on the European benchmark TTF exchange in the Netherlands. Ireland’s gas is sourced through the London exchange, which the measure does not apply to.
However, there could nevertheless be an indirect effect, depending on how the cap works in practice, the Minister for the Environment, Climate and Communications Mr Ryan told The Irish Times.
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“The trade that’s currently in the TTF, some of it could switch to London, some of it could switch to the over-the-counter trade. All these market mechanisms are very complex. It’s uncertain, but in all likelihood we are less impacted because we are buying our gas off the UK market. So it probably doesn’t have as immediate consequences for ourselves, but it could have depending on how it works in practice.”
Ireland had been “cautious” about the idea of imposing a cap on gas prices due to concerns that it could inadvertently reduce the availability of supply if suppliers choose to sell their gas elsewhere. But it was clear that the required qualified majority of the 27 countries was in favour, and Ireland was “happy to support it in the end” after “caveats” were secured into the deal including the need for further analysis by the European Commission and by regulators.
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The deal on the gas cap came just after the EU reached a separate agreement with Britain to enable co-operation on the development of a renewable energy grid between the North Sea countries. The UK had to leave the prior co-operation arrangement due to Brexit.
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Mr Ryan said reaching a memorandum of understanding with the UK had been one of the “main aims” of the Irish presidency of the North Seas Energy Cooperation which concluded with the deal.
“It’s important for us on energy security, and for the industrial development opportunities around offshore wind,” Mr Ryan said, adding that there would be a new energy interconnector linking Wexford and Wales. “Hopefully, when you get co-operation on this sort of level on these issues it may help us on the wider discussions around the protocol.”
The British government also welcomed the deal as the start of a “new phase in UK-EU co-operation”.
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There were also positive signals as the European Commission also announced on Monday that it would extend a grace period to allow people in the North, the Republic, in Malta and Cyprus to continue to buy veterinary medicines from the UK.
“This is a practical solution to a practical problem. And it underlines our genuine commitment to engaging constructively with the UK to find agreed solutions around the protocol,” European Commission vice-president Maroš Šefčovič said.
He said there was a “window of opportunity for a positive outcome, for the benefit of people and businesses in Northern Ireland. I therefore hope that we can carry today’s positive announcement into other areas of our discussion.”
