Ursula von der Leyen has unveiled a sequence of long-awaited proposals to sort out the EU's worsening power disaster and curb the hovering payments which are placing European households and firms underneath monetary stress.
The European Fee president proposed an EU-wide plan to scale back electrical energy consumption, a worth cap on the surplus revenues made by renewables and nuclear power, a solidarity mechanism to seize the "large" and "surprising" income reaped by fossil gasoline corporations, and a state assist programme to inject additional liquidity into struggling utility companies.
"The manipulation of the fuel markets has a spill-over impact on the electrical energy market," von der Leyen mentioned on Wednesday afternoon.
"We're confronted with astronomic electrical energy costs for households and firms and with monumental market volatility."
Von der Leyen additionally put ahead a worth cap on imports of Russian pipeline fuel, which, if launched, may push the Kremlin to retaliate and completely droop fuel flows.
"We should reduce Russia's revenues which Putin makes use of to finance this atrocious conflict in opposition to Ukraine," she mentioned.
Over the previous few months, Gazprom has diminished the fuel stream by means of its pipelines, shutting down Nord Stream 1 for an indefinite period of time.
Because of this, von der Leyen defined, the share of Russian pipeline fuel within the EU's whole imports has plunged from 40% earlier than the conflict to 9% at present.
Norway, she mentioned, has changed Russia because the bloc's main fuel provider.
The president added her companies have been additionally analyzing the potential of a worth cap on all imported fuel, which would come with liquefied pure fuel (LNG), a commodity that has turn into key to diversifying away from Russia.
Nevertheless, this far-reaching cap wouldn't be tabled in the meanwhile.
"LNG is scarce and might be rerouted to totally different areas," von der Leyen mentioned. "We [want to] keep aggressive for LNG suppliers however ensure that the costs we pay will not be terribly excessive however in an honest vary."
'We have to flatten the peaks'
The measures offered by the Fee chief are all of outstanding nature and replicate the balancing act between intervening within the free market and guaranteeing the safety of power provides.
The primary proposal, electrical energy financial savings, would set up a "necessary goal" for limiting energy use throughout peak hours when the position of fuel turns into outsized and the payments swell.
"This requires good discount in demand. We'd like a method to flatten the peaks which drives the worth of electrical energy," von der Leyen mentioned.
The EU has already put in place a voluntary plan to chop fuel consumption by 15% earlier than subsequent spring.
The second proposal is supposed to restrict the surplus revenues made by so-called inframarginal turbines, that's, those that do not use fuel to supply electrical energy, akin to renewables, nuclear and coal, and have considerably decrease manufacturing prices.
For the reason that last worth of electrical energy is all the time set by the most costly gasoline to fulfill calls for – on this case, fuel – these inframarginal turbines are seeing "revenues they by no means dreamt and that they can't reinvest as quick," von der Leyen mentioned.
The distinction between the ultimate electrical energy worth and the yet-undefined EU cap would create additional funds for governments, which might then be used to help shoppers in want.
"It's now time for shoppers to profit from the low prices of low-carbon power sources," von der Leyen mentioned.
The same mechanism might be utilized to fossil gasoline corporations that commerce oil and fuel, however this could goal their declared income, fairly than the market dynamics.
The 5 concepts shall be additional mentioned by EU power ministers on Friday throughout an emergency assembly, the place politicians are anticipated to provide the Fee a clearer political mandate on tips on how to transfer forward.
The cap on Russian fuel is poised to be essentially the most divisive proposal, given the totally different ranges of dependency amongst member states. Final week, Hungary introduced a brand new contract with Gazprom for an additional 5.8 million cubic metres of each day fuel.
As soon as agreed, the measures might be quickly launched underneath an emergency process.
Fee officers had beforehand rejected different drastic proposals, akin to subsidies for carbon emissions permits or an outright suspension of the wholesale market.
The chief additionally dismissed the potential of making use of the Iberian mannequin – a subsidised cap on fuel costs – to your complete EU market, fearing it might encourage greater consumption of fuel and make nations extra susceptible to Russia's provide manipulation.
Von der Leyen and her crew have been the goal of criticism in current days, with each European Council President Charles Michel and Belgian Prime Minister Alexander De Croo decrying the late collective response to the power disaster.
Market intervention "ought to have been finished earlier, and it is a disgrace that it took so lengthy," De Croo mentioned.
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