EC proposes cap on low-carbon power revenues as part of energy measures

European Commission (EC) president Ursula von der Leyen today proposed a set of measures in response to the “astronomic” electricity prices and market volatility Europe is facing as a result of the energy markets manipulation by Russia.

Von der Leyen outlined five immediate measures, including a cap on revenues of companies producing electricity with low costs. Low-carbon energy sources such as renewables are making unexpected revenues and it is now time for consumers to benefit from their low costs, she said. The commission will propose re-channelling these windfall profits to aid vulnerable people and companies.

The measures also include a solidarity contribution for oil and gas companies as they have also made big profits, as well as a cap on Russian gas to cut Russia's revenues for financing the war against Ukraine.

The proposals further include liquidity support by member states for energy utility companies and smart reduction in demand. “We will propose a mandatory target for reducing electricity use at peak hours. And we will work closely with the Member States to achieve this,” she said.

The EU energy ministers will discuss the measures at a meeting on Friday.

Von der Leyen also said the EU has increased its preparedness achieving common gas storages of 82% and has reduced the share of Russia's pipeline gas from 40% of all imported gas at the beginning of the war to 9% now.

Earlier this week, Germany introduced a third relief package for its citizens and businesses, including a windfall tax on power producers that make excess profits in the current situation.

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