Energy prices: EU Commission proposes emergency interventions on the market to reduce Europeans’ bills

Energy prices: EU Commission proposes emergency interventions on the market to reduce Europeans’ bills
Energy prices: EU Commission proposes emergency interventions on the market to reduce Europeans’ bills
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The European Commission is today proposing an emergency intervention on the European energy markets “against the recent dramatic price increases”. The EU, reads a note released in Strasbourg, “is facing the effects of a serious imbalance between energy demand and supply, largely due to Russia’s continued exploitation of energy resources for war purposes”. To alleviate the growing pressure on European households and businesses, the Commission “takes a further step to resolve this situation by proposing exceptional measures to reduce the demand for electricity, which will help reduce the cost of electricity for consumers, and measures to redistribute surplus revenues from the energy sector to end customers. The proposal follows previously agreed measures to fill gas deposits and reduce gas demand in preparation for the coming winter.
“The first response to high prices is reduced demand, which can impact electricity prices and generally calm the market. To intervene on the most expensive times of consumption, when the electricity produced with gas has a significant impact on the price, the Commission proposes the obligation to reduce the consumption of electricity by at least 5% during peak times of the selected prices “. Member States will have to identify peak price times, equal to 10% of total hours, with the highest expected price and reduce demand in those periods. The Commission also proposes that Member States work to reduce overall electricity demand by at least 10% until 31 March 2023. “Member States will be able to choose the appropriate measures to achieve this, including financial compensation”.
The Commission also proposes to apply a temporary ceiling on the revenues of “inframarginal” electricity producers, who generate electricity with less expensive technologies, such as renewables, nuclear and lignite, and feed the grid at a lower cost than the level price set by “marginal” producers, who have higher costs. Revenues that exceed the ceiling will be collected by the governments of the member states and used to reduce the bills of energy consumers.
The Commission is also proposing a temporary solidarity contribution on excess profits generated by activities in the oil, gas, coal and refining sectors which will not be subject to the cap on intra-marginal revenues. This time-limited contribution would maintain investment incentives in the green transition. “It would be levied by member states on the part of the 2022 profits that exceeds a 20% increase on the average profits of the previous three years. The revenues would be taken from the Member States and passed on to energy consumers, in particular vulnerable families, the most affected companies and energy-intensive industries ”.

The article is in Italian

Tags: Energy prices Commission proposes emergency interventions market reduce Europeans bills

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