The EU agreed to limit gas prices, but some analysts are skeptical
Pipes run along a technical facility for compressing natural gas on the site of astora GmbH’s Rehden natural gas storage facility, the largest in Western Europe.
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The European Union Monday concluded two months of heated talks over how to protect households from rising energy prices — but some analysts argue the bloc’s solution is unsustainable and might not withstand the realities of a 2023 gas supply crunch.
EU members compromised by adopting a “dynamic” cap on the price that can be bid for front-month gas contracts on Europe’s benchmark trading facility.
The level at which the cap is triggered was lowered to 180 euros per megawatt hour, after an initial proposal of 275 euros per megawatt hour was criticized as far too high by countries including Poland, Spain and Greece.
The 180 euro limit must be surpassed for three working days on the Dutch Title Transfer Facility (TTF), and it must be 35 euros per megawatt above the global reference price for liquefied natural gas over the same period.
Several conditions were inserted to allay the concerns of members such as Germany, which had argued that the scheme could result in gas shortages next year. These clauses prompt an automatic suspension of the cap and include the dynamic bidding rate dropping below 180 euros per megawatt hour for three consecutive working days, or the European Commission declaring an emergency.
Germany eventually voted in favor of the so-called “market correction mechanism,” but the Netherlands and Austria abstained.
Austria’s ministry for climate action said in a Tuesday statement that while it was “confident that the market correction mechanism can play an important role to avoid extreme spikes in European gas prices, the last minute extension of the mechanism on more gas hubs than the TTF does issue some concerns.”
The ministry noted that “there are some risks that the necessary safeguards are undermined by this extension.” Austria depends on Russian gas.
Rob Jetten, Dutch energy minister, said that the mechanism remained “unsafe” despite the latest improvements. He flagged that it could disrupt the European energy market, risk security of supply and have wider financial implications.
“From its inception, we have been very clear about this mechanism: it does not solve the core problem,” he said, adding that the Netherlands’ concerns were shared by the European Central Bank and by ICE (Intercontinental Exchange), the operator of the key natural-gas market in Europe.
The ECB earlier this month said “the current design of the proposed market correction mechanism may, in some circumstances, jeopardize financial stability in the euro area.” It declined to provide further comment to CNBC following the EU announcement.
ICE said in a statement it had “consistently voiced concerns” about the destabilizing impact of a price cap. It added that it would now review the details of the EU announcement to see whether it “can continue to operate fair and orderly markets for TTF from the Netherlands as per our European regulatory obligations.”
Easy to overturn?
The EU argued the mechanism will be monitored regularly and can be stopped if financial stressors or supply challenges are raised, in response to concerns flagged by the likes of the ECB.
Analysts told CNBC that these conditions called into question the ability of the mechanism to limit energy price rises.
“It reflects the challenge between strong rhetoric and the realities of the security of supply,” Nathan Piper, head of oil and gas research at Investec, said by phone. “It’s a cap, but allows them to operate above the cap if they really need the gas. The fact on the ground is, if you need the gas, you will pay any price, which is what Europe did in 2022.”
Piper listed two possible areas of additional upcoming demand: China and Europe. Beijing this month abruptly relaxed the zero-Covid policy it pursued this year. Europe has meanwhile managed to get its gas stores near-full for this winter by continuing to import Russian gas supplies — but plans to drop this intake drastically in 2023.
Europe and Asia remain net oil and gas importers, Piper continued, which means that intense competition for spot cargoes lies ahead. Around 70% of liquefied natural gas (LNG) is tied up in long-term contracts, leaving 30% available on a spot basis.
In a Tuesday interview with Reuters, Norway’s prime minister Jonas Gahr Støre said he did not expect more Norwegian LNG to be exported outside of Europe as a result of the new EU measure.
But Piper said, “There is no motivation for spot LNG carriers [other] than the highest price. So volumes could go up elsewhere, and [European] security would be jeopardized.”
Janko Lukac, senior analyst at Moody’s Investors Service, echoed this sentiment to CNBC: “The efficiency of an unilateral cap on purchase prices from the EU is highly uncertain.”
“LNG markets globally and structurally will be short for the next couple of years. Hence, if an international buyer is willing to pay a higher price, Europe runs the risk that the respective volumes will go to another buyer,” he said.
Long-term measures
Energy Minister Rob Jetten said it was more important for the EU to focus on its electricity savings targets, on joint gas purchasing agreements and on issuing faster permits for renewable energy schemes.
Ending energy dependency was the key reason why Pavel Molchanov, managing director for renewable energy at wealth management firm Raymond James, said the mechanism was a “stop-gap measure.”
“The solution for Europe will be to diversify its energy mix away from fossil fuels entirely,” Molchanov told CNBC’s “Squawk Box Asia” Tuesday.
“As it stands, about 20% of Europe’s electricity comes from natural gas, 10% comes from coal. Both of these commodities are up dramatically as a result of the war, and the Kremlin’s weaponization of energy exports.”
Energy transition solutions — such as wind, solar and green hydrogen, as well as increasing energy efficiency and removing coal from the electricity mix — could be put on an accelerated timetable to rid Europe of natural gas concerns within five years, he said.
Ending the war premium
EU ministers in favor of the mechanism were upbeat about its impact.
Kadri Simson, European commissioner for energy, said the initiative would “take away the war premium, the mark-up compared to global LNG prices, that Europe pays” due to pricing on the Dutch TTF.
Tinne Van der Straeten, Belgium’s energy minister, said the move would ensure security of supply while protecting citizens and the economy from higher prices.
Investec’s Nathan Piper also said that there were strong reasons why Europe needed to bring down gas prices beyond the strain on households.
“Very high gas prices for multiple years will have major impacts on the competitiveness of European industry. The U.S. gas price is a fraction of Europe’s because they are self-sufficient, so industry could move to where input costs are lower,” he said. “That means a long-term risk for Europe and the U.K. if energy costs can’t come down.”
Environment
EcoFlow members can save up to 65% on power stations while supporting disaster relief during the 2025 Member’s Festival
Portable power station specialist EcoFlow is kicking off its third annual Member’s Festival this month and is offering a unique new rewards program to those who become EcoFlow members. The 2025 EcoFlow Member’s Festival will offer savings of up to 65% for its participating customers, and a portion of those funds will be allocated toward rescue power solutions for communities around the globe through the company’s “Power for All” fund.
EcoFlow remains one of the industry leaders in portable power solutions and continues to trek forward in its vision to power a new tech-driven, eco-conscious future. Per its website:
Our mission from day one is to provide smart and eco-friendly energy solutions for individuals, families, and society at large. We are, were, and will continue to be a reliable and trusted energy companion for users around the world.
To achieve such goals, EcoFlow has continued to expand its portfolio of sustainable energy solutions to its community members, including portable power stations, solar generators, and mountable solar panels. While EcoFlow is doing plenty to support its growing customer base, it has expanded its reach by giving back to disaster-affected communities by helping bolster global disaster response efforts the best way it knows how– with portable power solutions.
EcoFlow and its members look to provide “Power for All”
Since 2023, EcoFlow has collaborated with organizations worldwide as part of its “Power for All” mission. This initiative aims to ensure access to reliable and timely power to disaster-affected communities across the globe, including rescue agencies, affected hospitals, and shelters, to support rescue and recovery efforts.
This fund most recently provided aid for communities affected by the recent Los Angeles wildfires, assistance to the Special Forces Charitable Trust (SFCT) in North Carolina following severe hurricanes, and support for non-profits engaged in hurricane preparedness in Florida and the Gulf Coast. Per Jodi Burns, CEO of the Special Forces Charitable Trust:
In the wake of devastating storms in Western North Carolina, reliable power was a critical need for the families we serve. Thanks to EcoFlow’s generous donation of generators, we were able to provide immediate relief, ensuring these families and their communities had access to power when they needed it most. We are so impressed with EcoFlow’s commitment to disaster response through their ‘Power for All’ program. It has made a tangible impact, and we are deeply grateful for their support and partnership in helping these families recover and rebuild.
In 2024, the US experienced 27 weather and climate events, each causing losses exceeding $1 billion, marking the second-highest annual total on record, according to National Centers for Environmental Information. The increasing frequency and severity of natural disasters underscore the critical need for reliable and timely power solutions during emergencies, much like EcoFlow and its members are helping provide through the “Power For All” initiative.
To support new and existing EcoFlow members, the company is celebrating its third annual Member’s Festival throughout April to offer a do-not-miss discount on its products and donate a portion of all sales to the “Power for All” fund to provide rescue power to those in need in the future. Learn how it all works below.
Save big and give back during the 2025 Member’s Festival
As of April 1st, you can now sign up to become an EcoFlow member to participate in the company’s exclusive 2025 Member Festival.
As a member, you can earn “EcoFlow Power Points” by completing tasks like registration, referrals, and product purchases and tracking your individual efforts toward disaster preparedness and recovery.
Beginning April 4, EcoFlow members will also be able to take advantage of exclusive discounts of up to 65% off select portable power stations, including the DELTA Pro Ultra, DELTA Pro 3, DELTA 2 Max, DELTA 3 Plus, RIVER 3 Plus, and more. However, these sale prices only last through April 25, so you’ll want to move quickly!
Click here to learn more about EcoFlow’s “Power for All” campaign. To register for EcoFlow’s 2025 Member Festival in the US, visit the EcoFlow website. To register as a member in Canada, visit here.
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Tesla is losing another top talent: its long-time head of software, David Lau, has reportedly told co-workers that he is exiting the automaker.
Tesla changed how the entire auto industry looks at software.
Before Tesla, it was an afterthought; user interfaces were rudimentary, and you had to go to a dealership to get a software update on your systems.
When Tesla launched the Model S in 2012, it all changed. Your car would get better through software updates like your phone, the large center display was responsive with a UI that actually made sense and was closer to an iPad experience than a car.
Tesla also integrated its software into its retail experience, service, and manufacturing.
David Lau deserves a lot of the credit for that.
He joined Tesla in 2012 as a senior manager of firmware engineering and quickly rose through the ranks. By 2014, he was promoted to director of firmware engineering and system integration, and in 2017, he became Vice President of software.
Lau listed the responsibilities of his team on his LinkedIn:
- Vehicle Software:
- Firmware for the powertrain, traction/stability control, HV electronics, battery management, and body control systems
- UI software and underlying Embedded Linux platforms
- Navigation and routing
- iOS and Android Mobile apps
- Distributed Systems:
- Server-side software and infrastructure that provides telemetry, diagnostics, over-the-air updates, and configuration/lifecycle management
- Data engineering and analytics platforms that power technical and business insights for an increasingly diverse set of customers across the company
- Diagnostic tools and fleet management, Manufacturing and Automation:
- Automation controls (PLC, robot)
- Server-side manufacturing execution systems that power all of Tesla’s production operations
- Product Security and Red Team for software, services, and systems across Tesla
Bloomberg reported today that Lau told his team he is leaving Tesla. The report didn’t include reasons for his stepping down.
Electrek’s Take
Twelve years at any company is a great run. At Tesla, it’s heroic. Congrats, David, on a great run. You undoubtedly had a significant impact on Tesla and software advancements in the broader auto industry.
He is another significant loss for Tesla, which has been losing a lot of top talent following a big wave of layoffs around this time last year.
I wonder who will take over. Michael Rizkalla, senior director of software engineering and vehicle firmware, is one of the most senior software engineers after Lau. He has been at Tesla for 7 years, and Tesla likes to promote within rather than hire outsiders.
There are also a lot of senior software execs working on AI at Tesla. Musk has been favoring them lately and he could fold Lau’s responsibilities under them.
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Kia’s electric SUVs are taking over. The EV3 is the best-selling retail EV in the UK this year, giving Kia its strongest sales start since it arrived 34 years ago. And it’s not just in the UK. Kia just had its best first quarter globally since it started selling cars in 1962.
Kia EV3 is the best-selling EV in the UK through March
In March, Kia sold a record nearly 20,000 vehicles in the UK, making it the fourth best-selling brand. It was also the second top-seller of electrified vehicles (EVs, PHEVs, and HEVs), accounting for over 55% of sales.
The EV3 remained the best-selling retail EV in the UK last month. Including the EV6, three-row EV9, and Niro EV, electric vehicles represented 21% of Kia’s UK sales in March.
Kia said the EV3 “started with a bang” in January, darting out as the UK’s most popular EV in retail sales. Through March, Kia’s electric SUV has held on to the crown. With the EV3 rolling out, Kia sold over 7,000 electric cars through March, nearly 50% more than in Q1 2024.
The EV3 was the best-selling retail EV in the UK in the first quarter and the fourth best-selling EV overall, including commercial vehicles.
Starting at £33,005 ($42,500), Kia said it’s the “brand’s most affordable EV yet.” It’s available with two battery packs, 58.3 kWh or 81.48 kWh, good for 430 km (270 miles) and 599 km (375 miles) of WLTP range, respectively.
With new EVs on the way, this could be just the start. Kia is launching several new EVs in the UK this year, including the EV4 sedan (and hatchback) and EV5 SUV. It also confirmed that the first PV5 electric vans will be delivered to customers by the end of the year.
Electrek’s Take
Globally, Kia sold a record 772,351 vehicles in the first quarter, its best since it started selling cars in 1962. With the new EV4, the brand’s first electric sedan and hatchback, launching this year, Kia looks to build on its momentum in 2025.
Kia has also made it very clear that it wants to be a global leader in the electric van market with its new Platform Beyond Vehicle (PBV) business, starting with the PV5 later this year.
Earlier today, we learned Kia’s midsize electric SUV, the EV5, is the fourth best-selling EV in Australia through March, outselling every BYD vehicle (at least for now). The EV5 is rolling out to new markets this year, including Canada, the UK, South Korea, and Mexico. However, it will not arrive in the US.
For those in the US, there are still a few Kia EVs to look forward to. Kia is launching the EV4 globally, including in the US, later this year. Although no date has been set, Kia confirmed the EV3 is also coming. It’s expected to arrive in mid-2026.
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