Gas at 100 euros: in Luxembourg, Europe prepares for an expensive winter, solidarity must come before the quarrel over powers

The energy ministers of the Twenty-Seven are meeting this Thursday, 29 October, in Luxembourg with one figure on their minds: 100 euros. According to Euronews, the Dutch TTF contract, the European benchmark for gas delivered the following month, reached 100.37 euros per megawatt hour on Wednesday afternoon, a first since December 2022. Before the war in Iran began in late February, it was trading at around 32 euros.

The facts

The meeting focuses on security of supply ahead of winter 2026-2027, according to Agence Europe, which notes that this part is discussed behind closed doors, while the public session is devoted to electricity network tariffs. Irish broadcaster RTÉ recalls the context: the wars in Iran, Ukraine and Yemen have damaged refineries and disrupted flows through the Black Sea, the Red Sea and the Strait of Hormuz.

Stocks are a concern. According to figures from the European agency ACER reported by Euronews, the Union's gas reserves were 75% full on 21 October, compared with 83% a year earlier according to RTÉ. Agence Europe reports that the filling target has been lowered from 90% to 80%, to be reached by 1 December, thanks to the flexibility provided for in the European regulation. ACER also estimates that the war has pushed the Union's gas import bill from 18 to 33 billion euros.

Energy Commissioner Dan Jørgensen is downplaying nothing. According to RTÉ, he said Europe is in a "very serious" situation, stressing the price more than the risk of shortages.

We are now in a very serious situation — Dan Jørgensen, European Commissioner for Energy

The positions at stake

The Irish presidency put three questions to the ministers, Agence Europe reports: how to prepare for a partial or total, lasting closure of the Strait of Hormuz, whether demand reduction measures should be considered at European level, and how to make infrastructure more resilient to climate hazards after the summer's heatwaves and drought.

The Commission, for its part, is pushing its 17 July proposal aimed at reducing the costs of the electricity system. According to RTÉ, it notably plans to lower bills through a reform of taxation and network charges, with electricity not to be taxed more than gas. The idea is simple: encourage electrification, and so reduce dependence on imported hydrocarbons. Brussels has also opened talks with European refiners to increase their output, according to the same source.

Some states have chosen the path of direct intervention. The specialist outlet Contexte reports that an industry lobby has urged ministers not to copy Italy's price cap on electricity produced from gas, a sign that the temptation to regulate prices is gaining ground and meeting resistance.

In France, the criticism comes from Parliament. On 27 October the Senate adopted a resolution delivering a reasoned opinion on whether the Commission's proposal complies with the principle of subsidiarity, at the initiative of Senator Daniel Gremillet on behalf of the European affairs committee, as the Senate website indicates. According to the analysis published by the law firm Kohen Avocats, senators support the goal of lower bills but refuse to let the method for calculating network tariffs be set by delegated acts of the Commission, whereas in France these tariffs fall to the Energy Regulatory Commission. They also challenge the tax rule on electricity and gas, which in their view requires unanimity, and the idea of European priorities for grid connections.

The analysis

Both sides are partly right. The Commission is right to want electricity, largely decarbonised in France, to cost less than imported gas: it is a choice of sovereignty as much as of ecology. The Senate is right to point out that the network tariff is an equalisation tool, which guarantees that a rural household pays for the grid at the same price as an urban one. This principle of territorial equality is a hallmark of French public service, and it must not dissolve into a harmonised method decided far from elected representatives.

But the timing changes the nature of the debate. With gas three times more expensive than before the war and low stocks, the priority this winter is not the division of powers: it is protecting low-income households and exposed businesses. A prolonged legal quarrel between Paris and Brussels would leave the field open to scattered national solutions, where each country protects its consumers at the expense of its neighbours in a common market.

France has the means to take a leading role. Its nuclear and hydroelectric fleet makes it less dependent on gas for its electricity. It can therefore argue at the same time for joint purchases of liquefied natural gas, for a coordinated and voluntary reduction in demand, and for a targeted social shield partly funded by a levy on the sector's windfall profits, rather than for general aid that benefits the largest consumers first.

Conclusion

Europe already got through the winter of 2022 by improvising. It learned that solidarity between states costs less than competing for the same cargoes. France can defend tariff equalisation and the powers of its regulator while supporting the European goal of less heavily taxed electricity. The question facing the ministers gathered in Luxembourg is simple: will they manage to decide, before the first cold spell, who will be protected first if the Strait of Hormuz stays closed?

Article written with the help of artificial intelligence.