The European Union executive plans to raise more than $140 billion to protect consumers from rising energy prices by cutting revenues from low-cost power generators and making fossil fuel companies share in the profits. unexpected.
The European Commission published the proposals on Wednesday, as the 27-member European Union grapples with an energy crisis fueled by the russian invasion from Ukraine.
Governments across Europe have already invested billions of euros in tax cuts, aid and subsidies to deal with a crisis that is triggering inflation, forcing industries to close production and increasing bills for the winter.
“In these times, the benefits must be shared and channeled to those who need it most,” declared the president of the European Commission, Úrsula von der Leyen, before the European Parliament in Strasbourg. She added that the plans should raise more than €140 billion for member states to redirect towards helping businesses and retail consumers.
EU countries will have to negotiate the Commission’s proposals and agree on final laws.
The plan does not include an earlier idea of capping Russian gas prices. EU countries are divided on whether a broader cap on gas prices would help or hurt efforts to secure winter supplies.
With caps on gas prices lifted, at least for now, some diplomats were optimistic that a deal could be reached at the EU energy ministers’ meeting on September 30.
Von der Leyen said the commission was “discussing” price caps and had started talks with Norway about lowering gas prices.
The commission’s proposals would eliminate excess revenue from wind, solar, nuclear and lignite-fired coal plants, imposing a cap of $180 per MWh through March on the revenue they receive from generating electricity.
This would cause generators’ revenues to be limited to less than half current market prices. Electricity prices in the EU are usually set by gas, so the measure would apply to generators that sell their power at such high prices but don’t need to buy the expensive fuel.
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