Ursula von der Leyen has called for electricity consumption to be cut at peak hours by at least 5% across the bloc
The President of European Commission – Ursula von der Leyen has called for electricity consumption to be cut at peak hours by at least 5% across the bloc and windfall taxes on energy firms to tackle the rising prices.
With gas and electricity prices hitting all-time highs after Russia’s invasion of Ukraine, Member States will be required to identify the 10% of hours with the highest expected price and reduce demand during those peak hours.
The European Commission also proposed that Member States must aim to reduce overall electricity demand by at least 10% until March 31, 2023. They can choose the appropriate measures to achieve this demand reduction, which may include financial compensation. Reducing demand at peak times would lead to a reduction of gas consumption by 1.2 bcm over the winter.
Taking it to twitter, the European Commission tweeted,
The first response to high prices is to reduce demand.
— European Commission 🇪🇺 (@EU_Commission) September 14, 2022
We are proposing an obligation for EU countries to reduce demand during peak hours by at least 5%.
Reducing peak demand would reduce gas consumption by 1.2bcm over the winter.
👇 pic.twitter.com/VGxU1PjhIX
It further tweeted,
In these times, profits must be shared and channelled to those who need it the most.
— European Commission 🇪🇺 (@EU_Commission) September 14, 2022
We propose a cap on the revenues of companies that produce electricity at a low cost.
This will raise up to €117 billion for EU countries to help bring down energy bills.
👇 pic.twitter.com/ILKQXmTeMM
Meanwhile, the plans to cap the price of natural gas have been put on hold. The plan outlined in Strasbourg targets excess revenues with proposals to skim the profits of low-carbon electricity producers and implement a de facto windfall tax on the oil, gas and coal sectors. The money raised, estimated to be € 140 billion (£ 121 billion; U.S. $ 141 billion), would go to families and businesses across the bloc.
Companies producing energy from low-carbon sources such as wind, solar and nuclear would face a cap of € 180 per megawatt hour (MWh) on their revenue.
Speaking on the occasion, the Vice-President of European Commission – Frans Timmermans said, “Power generators with lower operating costs have been able to reap extraordinary profits, way beyond what may have reasonably expected based on investment decisions.”
The windfall tax on fossil fuel producers and refiners would require them to contribute 33% of their taxable surplus profit.
Before Russia’s invasion of Ukraine, Russia accounted for 40% of the European Union (E.U.’s) imported gas. This has fallen to below 10% since the invasion. In summers, the European gas prices were about 10 times higher than their average level over the past decade. The E.U. Member States have managed to stockpile gas reserves for the winter to 84% of capacity.
