Addressing high energy prices in the EU
The European Commission has recently proposed a Council Regulation to tackle the dramatic rises in energy prices in the EU. The proposal is aimed to ease the increased pressure on households and businesses.
Some of the proposed measures include the reduction of electricity consumption by at least 5% during selected peak price hours and the overall electricity demand by at least 10% by the end of March 2023.
The Commission is also proposing a temporary revenue cap on ‘inframarginal’ electricity producers, namely technologies with lower costs, such as renewables, which provide electricity to the grid at a cost below the price level set by the more expensive ‘marginal’ producers.
Thirdly, the Commission is also proposing a temporary solidarity contributionon excess profitsgenerated from activities in the oil, gas, coal and refinery sectors which are not covered by the inframarginal revenue cap.
The Commission is also proposing to expand the Energy Prices Toolbox to allow below cost regulated electricity prices for the first time, and expand regulated prices to also cover small and medium-sized enterprises. The proposal is one of several initiatives being taken to bring down the price of gas, and reform the electricity market design for the longer term.