Brussels plans to set electricity prices at 200 euros per megawatt hour

Posted Sep 7, 2022 at 1:50 pmUpdated on September 7, 2022, 6:04 PM

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

Power savings imposed during peak hours, a ceiling on electricity prices, bailing out of excess profits from Russian gas and electricity companies and oil companies… were all announced by European President Ursula van der Leyen on Wednesday. The Commission of European Energy Ministers will act on Friday during an extraordinary Council.

“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 that his country will not supply oil and gas to countries that take 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.

See also  Volodymyr Zelensky is trying to snatch the support of the African Union

But the primary measure that is drawing all the attention is the plan to cap the price of electricity produced by non-gas plants (wind, nuclear and coal-fired power plants) at 200 euros per megawatt hour. A figure on which the head of the Commission did not comment and was removed from the version of the speech to journalists… The latter does not exclude the ceiling of other gases such as liquefied natural gas: “The project table,” she 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 the 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. Therefore, companies that produce low-cost energy, making exponential profits, will be asked to redistribute this “rent” to vulnerable consumers and businesses.

The same goes for the profits of fossil fuel companies. The commission recommends “joint contribution” of these oil and gas companies. 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.

Energy suppliers struggling to cope with rising prices should be given “monetary support” by member states, and the Commission recommends pledging to authorize the rapid issuance of public guarantees. “Times are tough, and they will last,” warned Ursula van der Leyen. The ball is now in the Member States’ court.

See also  Moscow and Kiev in search of an agreement to export Ukrainian grain

Leave a Reply

Your email address will not be published.