European gas declines as bloc prepares details for intervention

Bloomberg

Natural gas prices fell as the European Union started outlining details of its intervention into an unprecedented energy crisis, including a proposal for targets to reduce electricity demand. Power prices also slumped.
Benchmark gas futures declined as much as 9.3% to the lowest in a month. Still, prices remain almost eight times higher than normal for the time of year. Goldman Sachs Group Inc. expects they will halve from current levels sometime in the first quarter of 2023.
The EU is seeking to curb power consumption and provide liquidity to energy markets as it seeks to prevent the crisis from engulfing the broader economy. While Russia has reduced supplies, the bloc is hoarding gas and trying to diversify its fuel sources as winter approaches.
The European Commission, the EU’s executive arm, will propose two targets on power demand reduction: an objective to cut overall consumption and a mandatory goal on lowering demand during selected peak hours, according to a draft regulation seen by Bloomberg News.
It will also aim to cap excessive revenues of companies producing power from sources other than gas, through a limit on the price of electricity generated from technologies such as renewables, lignite or nuclear energy. All changes need to be signed off by member states.
“We are seeing a major energy crisis — but I still don’t see this being translated into facts in terms of energy demand reduction in our daily lives,” Anne-Sophie Corbeau, a research scholar at the Center on Global Energy Policy at Columbia University who previously worked for British oil major BP Plc.