The European Commission has today (Wednesday, September 14), proposed emergency market intervention to reduce energy prices across the European Union (EU).
The commission proposed measures including a reduction in electricity consumption; a revenue cap for low-cost power generation; and a solidarity contribution from fossil fuel companies.
A 5% reduction in electricity consumption during peak hours, as well as a minimum 10% cut in member states’ overall demand until March 31, 2023 has been proposed.
Member states would therefore be required to identify the 10% of hours with the highest expected price and reduce demand during those hours, which, the commission said, can reduce gas use for power by around 4% over the winter.
Further measures
A temporary revenue cap at €180 EUR/MWh for low-cost electricity producers, which have been making exceptional revenues at relatively stable operational costs, including nuclear and renewable energy, has also been proposed.
The European Commission said that revenues above the cap will be collected by member state governments and used to help energy consumers reduce their bills.
A temporary solidarity contribution on excess profits generated from activities in the oil, gas, coal and refinery sectors, which are not covered by the revenue cap, is also sought by the commission.
The contribution will be collected by member states on 2022 profits which are above a 20% increase on the average profits of the previous three years, and redirected to vulnerable households, hard-hit companies, and energy-intensive industries.
In a further intervention in the electricity market rules, the expansion of the Energy Prices Toolbox available to help consumers has also been proposed.
EU Commission
Commenting on today’s announcement, president of the commission, Ursula von der Leyen said: “Russian aggression and manipulation is affecting global and European energy markets, and we need to be resolute in our response.
“Today, the European Commission is bringing further proposals to the table which member states can swiftly adopt and implement to ease the pressure on households and businesses.
“We continue to stand united in the face of Putin’s weaponisation of gas and ensure we minimise the impact of high gas prices on our electricity costs in these exceptional times.”
Today’s proposals made by the European Commission follow on from previously agreed measures on filling gas storage and reducing gas demand to prepare for the upcoming winter.