EU Commission: Skim off "chance profits" from energy companies

Created: 07/09/2022, 13:25

The President of the European Commission, Ursula von der Leyen.

© Angelika Warmuth/dpa

The price of gas is currently also driving up prices for electricity from other energy sources.

The EU Commission now wants to take action against this.

Brussels - According to the will of the EU Commission, consumers should be relieved of the burden of income from excessive profits from energy companies.

"Low-carbon energy sources are currently making random profits that do not even begin to reflect their production costs," Commission President Ursula von der Leyen said in Brussels on Wednesday.

"We want to divert these unexpected profits to help particularly affected households and businesses adapt." The same applies to "windfall profits" from companies that do their business with fossil fuels, said von der Leyen.

The proposals are similar to federal government plans to siphon off excessive profits from electricity producers.

The EU states will now discuss this.

At present, the price of electricity in Europe is mainly determined by expensive gas-fired power plants, which are switched on to produce electricity due to the high demand.

Since the price of gas has risen sharply against the background of the war in Ukraine, electricity has also become more expensive.

Other energy companies that produce electricity more cheaply - for example from wind, solar or nuclear power - make big profits because they can also sell their electricity at the higher price.

Some of these "chance profits" are to be skimmed off and used to relieve the burden on consumers.

Price cap for imports of Russian gas

As a further measure against the high electricity prices, von der Leyen suggested reducing electricity consumption during times of high demand.

"We will propose a binding target for reducing peak-time electricity consumption."

At the same time, one must support the energy supply companies, which are currently struggling with the enormous volatility of the markets, said von der Leyen.

"We will update our state aid frameworks so that state guarantees can be provided swiftly in an emergency."

As a last measure, von der Leyen named a price cap for imports of Russian gas.

Since Russia halted supplies via Nord Stream 1, very little Russian gas has flowed to Europe via Ukraine and Turkey.

EU energy ministers will meet on Friday to discuss the various options.

dpa