As of: 09/13/2022 6:19 p.m
The EU Commission apparently wants to decide on an electricity price brake this month. A maximum price of 180 euros per megawatt hour is under discussion. Excessive profits from electricity producers are to flow to EU countries.
In the fight against high energy prices, the EU Commission wants to oblige the member states to skim off excessive profits from electricity producers. The proceeds are intended to relieve households and companies.
The EU states could decide on the planned electricity and gas price brake this month. The Czech Industry Minister Jozef Sikela announced that there will be a special meeting of the EU energy ministers on September 30th. He had invited the ministers to do so.
The Commission is expected to officially present its plans on Wednesday. According to information from the Reuters news agency, the EU leadership is proposing to introduce a maximum price for the sale of electricity of 180 euros per megawatt hour. Since the wholesale prices on the electricity exchanges are currently significantly higher, the difference should be skimmed off as a so-called chance gain and used to dampen prices.
Merit order principle drives the price
According to the Commission, producers of green or nuclear power are currently making enormous profits. Because the merit order principle applies in the European electricity market, according to which the costs of the last electricity source used to cover demand determine the price for all market participants. Currently, these are the gas power plants. So the high price of gas drives up electricity prices.
According to information from the AFP news agency, the EU Commission’s draft shows that the new requirements apply to those energy companies that produce electricity from wind and solar energy, lignite and nuclear power, among other things.
Price cap for gas imports?
According to the Commission’s proposal, oil traders and refiners should also cede a third of their profits via a levy, which is more than a fifth above the average of taxable profits over the last three years. The draft regulation also provides for a binding target for reducing electricity consumption at peak times. As the news agency Reuters reports, the EU Commission wants to force states to save five percent of their consumption in times of particularly high electricity prices on the exchanges.
A price cap for gas imports from Russia previously proposed by Commission President Ursula von der Leyen is therefore not included in the paper. Von der Leyen is expected to comment on Wednesday when she delivers her annual State of the Union address at the European Parliament in Strasbourg.
Incentives to save electricity
The Federal Government has already backed the Commission’s plans in principle. She is planning an electricity price brake to reduce costs for households, which is also to be financed by skimming off so-called excess profits from certain energy companies. The cabinet wants to use the revenue for households and businesses to reduce the cost of an electricity contingent. Anyone who consumes electricity beyond that should then pay the market price for it. This should be an incentive to save.
Economics Minister Robert Habeck said he wanted the profits to be skimmed off retrospectively for 2022. The dampening of the prices about a quota should come from next year.