EU Commission seeks cap on excess revenues of electricity companies

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The European Commission wants to limit the revenues of electricity companies that profit disproportionately from rising energy costs, EU Commission President Ursula von der Leyen said on Wednesday.

Companies producing electricity from renewable energy sources are currently making “enormous revenues, revenues they never calculated with, revenues they never dreamt of and revenues they cannot reinvest,” von der Leyen said.

“It is now time for the consumers to benefit from the low costs of low carbon sources, like for example, the renewables,” she said.

”Skimming off the excess revenues should make resources available to EU countries to support the vulnerable households and vulnerable companies,” the commission president said.

Von der Leyen proposed a “solidarity contribution” for fossil fuel companies.

The price of electricity in the EU is determined by the most expensive energy source needed for its production, meaning the rising electricity prices are driven by power plants that burn expensive gas to generate electricity.

Other energy companies that produce electricity from cheaper sources, including renewable, nuclear and some fossil fuels, match the high prices of gas-powered providers generating large revenues.

Von der Leyen also proposed to reduce electricity consumption during periods of high demand and put a price cap on imports of Russian gas to tackle high electricity prices.

EU energy ministers are to meet on Friday in Prague to discuss the different proposals.