The European Commission is proposing a range of measures to address spiralling energy costs, including imposing a cap on the price of Russian gas.  

The president of the commission Ursula von der Leyen today (Wednesday, September 7) outlined five different initiatives to deal with what she called the astronomical electricity prices for households and companies, and the “enormous market volatility”.

Her proposals include electricity savings, a cap on the revenues of companies producing electricity with low costs, and the imposition of a solidarity contribution on oil and gas companies.

In an address to the commission, Von der Leyen said: “First, Smart Savings of Electricity. What has changed is global energy supply is scarce. This calls for smart reduction in demand. We need a strategy to flatten the peaks which drives the price of electricity.  

“We will propose a mandatory target for reducing electricity use at peak hours. And we will work closely with the member states to achieve this.

“Second, we will propose a cap on revenues of companies producing electricity with low costs. Low carbon energy sources are making unexpected revenues, which do not reflect their production costs.

“It is now time for consumers to benefit from the low costs of low carbon energy sources, like renewables,” she added.

President von der Leyen said those revenues should be used to support vulnerable households and companies and to invest in clean home-grown energy sources.

The president added that energy utility companies must be supported to cope with the volatility of the markets, stressing that they are currently being requested to provide unexpectedly large amounts of funds, which threatens their capacity to trade and the stability of the future markets.

“Thus we will help to facilitate liquidity support by member states for energy companies,” she said.  

She said the EU cannot be blackmailed anymore by Vladimir Putin’s announcements on Russian gas.

“At the beginning of the war, Russia’s pipeline gas was 40% of all imported gas. Today it is now down to only 9% of our gas imports,” Von der Leyen stated.

“These are tough times. But I am convinced that Europeans have the economic strength, the political will, and unity to keep the upper hand.”

The measures will be discussed by EU energy ministers on Friday.