May 30, 2023

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Brussels wants to limit the income of electricity producers

Posted Sep 7, 2022 at 1:50 pmUpdated on September 7, 2022, 6:56 PM

This is a serious project proposed by the European Commission to mitigate Higher energy prices, To free both consumers and businesses and prepare for next winter.

Energy savings imposed at peak times, a limit on the income of electricity producers, another to recover the excess profits of companies in the Russian gas and energy sector… All this was announced on Wednesday by Ursula van der Leyen, the President. The European Commission, in which European energy ministers will work during an extraordinary council on Friday.

“We need to act as quickly as possible,” he said, adding that some believed the commission was too slow to make its decisions. Ambitious and complex, its implementation already promises to be a headache from a technical and legal perspective.

“Times Are Hard”

The rush is strong all over the world Energy prices are rising And Russia has partially or completely cut off gas to thirteen member states of the European Union.

The Brussels administration now clearly backs its intention to cap Russian gas prices to reduce Russia’s revenues. Vladimir Putin has already warned his country No longer supplies oil and gas For countries taking such action.

The commission says it is well prepared for winter. “We benefit from a common share of 82%, while we set a target of 80% in October,” pointed out Ursula van der Leyen, promising that the cap “could intervene quickly”. Today Russian gas accounts for only 9% of gas imported into Europe, compared to 40% at the beginning of the war in Ukraine.

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But the main measure that is drawing all the attention is to limit the income of electricity producers when they sell their production at more than 200 euros per megawatt hour. Wind, solar, nuclear and coal-fired power plants: All power generation capacity except gas-fired power plants will be covered.

This leaked figure was not commented on by the head of the Commission, and it was removed from the version of the speech communicated to journalists… The latter also did not exclude the ceiling on the import of liquefied natural gas: “The plan is on the table,” he said.

The EU executive also recommends “smart energy savings”, which would mean a binding target of reducing power consumption at peak times, when costs are high. how It is up to member states to define it.

Brussels introduces “auctions by specific categories of consumers [par exemple, les industriels] Submit offers on the amount of financial compensation they need to reduce their consumption. Clearly, the government will buy companies’ commitments to reduce consumption during peak hours. More savings, more financial compensation.

Ceiling on Russian gas

Financing of this activity will be ensured by distilling super profits of energy. Thus, the “rent” of low-cost energy companies that make high-speed profits will be redistributed to vulnerable consumers and businesses.

The same goes for the profits of fossil fuel companies. The commission recommends “joint participation” of these companies in the oil, gas and coal sectors. Is it a contribution to the exploration and production of gas and oil in the Union territory or a broad levy on oil companies based in the Union? A Cabinet meeting on Friday will clarify its intentions.

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The commission recommends that energy suppliers struggling to cope with rising prices be offered “monetary support” by member states, which promises to guarantee faster supply. General Warranties . “Times are tough, and they will last,” warned Ursula van der Leyen. The ball is now in the Member States’ court.