EU chief lays out five measures to tackle energy crisis

Brussels outlined on Wednesday (7 September) five proposals to tackle the high energy prices gripping Europe, including a mandatory target for reducing electricity use, capping the revenues of energy firms, and recycling the money raised to help vulnerable households.

The measures were announced by EU Commission President Ursula von der Leyen and will be discussed with EU countries on Friday at an emergency meeting.

“We are confronted with astronomic electricity prices for households and companies and with enormous market volatility,” von der Leyen told journalists in Brussels.

“Therefore, we will put forward a set of immediate measures that will protect vulnerable consumers and businesses and help them adapt,” she added.

The first idea is for the European Commission to propose a mandatory target for reducing electricity consumption during peak hours. Brussels will work closely with EU governments to achieve this, von der Leyen said, with the exact target yet to be decided.

Von der Leyen also laid out ideas for capping the price of energy, including a cap on revenue made by companies producing energy at 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,” von der Leyen said.

A leaked draft proposal seen by EURACTIV suggests this cap could be €200 per megawatt hour.

EU countries would use revenues made from this price cap to help vulnerable households and companies cope.

Fossil fuel companies could also be expected to help as oil and gas companies have made “massive profits”, according to von der Leyen. She wants a “solidarity contribution” from fossil fuel companies that would support vulnerable households and go towards investments in clean energy.

The European Commission will also propose a cap on Russian revenues the country has made from selling energy to Europe. The Kremlin, however, has warned it will not supply energy to Europe if a price cap is imposed, and Germany remains to be convinced.

“We remain sceptical when it comes to issues surrounding a gas price cap, but we are generally ready for talks in the European framework,” a spokesperson for Germany’s economy ministry was quoted as saying by Politico.

Asked whether the European Commission is considering a wider price cap on fossil gas, possibly on liquified natural gas, von der Leyen said the idea was “on the table”, and the EU executive is looking into it.

“What we are looking at now is that we stay competitive for the energy suppliers, but we make sure that the prices we pay are not extraordinarily high, but in a decent range,” she told journalists.

Finally, the EU chief laid out measures to support energy utility companies in fielding the market’s volatility.

“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,” von der Leyen said.

“Thus, we will help to facilitate Liquidity Support by Member States for energy companies. We will update our temporary framework to enable state guarantees to be delivered rapidly,” she added.

Meanwhile, the Czech Republic, which currently holds the EU rotating presidency, said it was looking at ways of decoupling electricity and gas prices. A second proposal is to set maximum prices for all types of electricity generation except gas-fired sources, Czech Industry and Trade Minister Jozef Sikela told journalists on Tuesday.

Von der Leyen takes reigns of energy crisis.

Most of the measures laid out by the EU chief were already seen in leaked “non-papers” sent to EU countries ahead of the emergency meeting of energy ministers scheduled for later this week.

The existence of these non-papers was acknowledged on Tuesday (6 September) by a European Commission spokesperson, who highlighted how rare it is that the EU executive even admits these exist.

Over the past week, some EU officials have expressed dismay at how the external communication of the non-papers and leaked documents have been handled. “Non-papers” do not have the same status as official Commission documents and do not go through the same internal clearing procedures.

Officials also pointed out that the work has been visibly detached from some of the Commissions in charge of the topic area. That includes Energy Commissioner Kadri Simson, who was not involved in Wednesday’s announcement as she is visiting New Delhi.

“Von der Leyen has made energy ‘Chefsache’, and the question is now whether this will be a good or a bad thing”, one EU official said.

Alexandra Brzozowski contributed reporting.

[Edited by Alice Taylor and Frédéric Simon]


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