The European power and gas markets are poised to undergo significant structural changes in response to the current energy crisis, as early as the first quarter 2023, according to a new report by S&P Global Ratings.
The European Union is considering several policy actions to address the energy crisis, including decoupling gas and other power prices as well as capping the price of E.U. gas imports or gas used for power generation. It also is looking at mandatory demand-curbing measures, including on power.
To preserve financial system stability, Europe also is addressing the severe liquidity concerns of some power exchanges and market participants. The Swedish, Finnish and U.K. governments separately have announced liquidity facilities to solvent participants together, worth more than €80 billion ($79.9 billion).
S&P Global Ratings says the degree to which the European Union and the United Kingdom’s selected policy actions could help stabilize and incr