European Union energy ministers on Monday finally agreed on a gas price cap after weeks of intense negotiations. For one year beginning  February, 2023, the cap will be triggered if the gas price exceeds 180 euros per megawatt-hour for three consecutive working days.

The energy crisis in Europe began after Russia launched a special military operation in Ukraine, prompting the US, Europe, and many other countries to impose a series of sanctions on Moscow. The International Energy Agency has warned that Europe could be short some 30 billion cubic meters of gas next year. This worrying prospect has forced EU countries to start looking for new energy solutions.

In recent months, European countries have been scrambling to buy and store as much gas as possible. As of November, the EU had filled up 95% of its gas reserves. Recent data from Bloomberg shows that Europe has spent an additional 1 trillion USD on energy due to rising prices.

Analysts say that although energy prices, particularly gas and crude oil prices, have dropped significantly from the peak in August, they remain much higher than at the end of last year. The current gas prices are twice what they were in January before the outbreak of the Russia-Ukraine conflict.

Since winter began, energy consumption has increased sharply. In Germany, the EU's largest economy, the Emergency Plan for Gas released a few days ago by the Federal Network Agency raised its gas consumption warning from "stressful" to "critical".