EU proposes emergency intervention to deal with soaring energy prices

EU proposes emergency intervention to deal with soaring energy prices

Xinhua News Agency, Brussels, September 14 (Reporter Kang Yi) The European Commission proposed on the 14th to carry out emergency intervention in the European energy market to alleviate the recent sharp rise in energy prices. The previously high-profile proposal to set a price cap on natural gas was not included due to controversy.

The main measures proposed by the European Commission include: Member States reduce electricity consumption by at least 5% during peak electricity consumption periods and reduce total electricity demand by at least 10% by March 31, 2023; Revenue caps for power generation companies are set at 180 euros per megawatt hour; a tax of at least 33% is imposed on excess profits generated by the oil, gas, coal and refining sectors. The latter two measures will help the EU raise about 140 billion euros, the European Commission said.

Timmermans, executive vice-president of the European Commission, told a news conference that these unprecedented measures were a necessary response to the shortage of energy supplies and high energy prices affecting Europe. Reducing electricity demand is fundamental to the success of these measures. Putting a cap on huge revenue would prompt profitable energy companies to help struggling users. The era of cheap fuels is over, and the EU needs to accelerate the transition to homegrown renewable energy.

Since the outbreak of the Ukrainian crisis, due to the backlash effect of EU sanctions on Russia, European energy supply has been tight, and natural gas and electricity prices have soared. Combined with a drop in hydropower generation due to extreme weather this summer, as well as the repairs and closures of some older plants, EU power generation has been low for the past few months, further exacerbating tight energy supplies and high prices, which are causing consumers and industry to suffer. The huge burden has inhibited the European economic recovery.

Previously, the European Commission proposed to only set a ceiling on Russian natural gas prices, and EU member states have great differences on this. Some member states are concerned that the measure will further affect Russian gas supplies to Europe, arguing that the move will not help calm rising gas prices. Also, proposals for a broader gas price cap have failed to gain broad support. Some member states believe that the move will lead to more natural gas being exported to other regions, which will worsen the energy woes in Europe and endanger the security of supply.

The European Commission's proposal requires the support of a majority of EU member states to be approved. EU energy ministers plan to hold another special energy meeting on September 30.