The European Commission proposes capping part of wholesale electricity prices, adopting regulated rates for the most vulnerable and reinforcing incentives to reduce consumption, according to a project consulted this Friday by AFP.
The European executive announced on Monday that it was preparing “an emergency intervention” in the electricity market to limit the rise in household and business bills, while working on a “structural reform” to decouple electricity prices from electricity prices. of gas, which skyrocketed with the war in Ukraine.
In a document to be examined by European energy ministers in Brussels on September 9, the Commission details three avenues of emergency measures, starting with a cap on wholesale prices for certain sources of electricity.
A regulated rate for SMEs
Currently, in the European market, it is the cost price of the last source of electricity mobilized to meet demand at any given time, which determines the price imposed on all operators on the continent: many times it is from a gas power plant.
The other energy sources (renewable, nuclear, coal) sell the electricity they produce at a price indexed to gas prices, much higher than their operating costs: Brussels therefore proposes limiting the price paid to these plants, in order to do away with windfall profits made by energy companies.
In return, the Member States could “reap additional financial income” (different in each country depending on their energy mix), which they could use to support the most vulnerable consumers: direct aid, regulated rates, reductions in the electricity bill .
No undifferentiated ceiling for consumers
This is the second recommended measure. “Less than half of the States use regulated tariffs, while direct income support continues to be the most used instrument in the EU to support households,” says the Commission, which wants to “provide a greater degree of legal certainty to extend the regulated tariffs (…) in particular with the possibility of a clear exception (to the European rules) to also cover SMEs”.
On the other hand, the European Executive declares itself against an indiscriminate cap on retail prices for all consumers, “an interventionist political measure that risks distorting the markets” and costing the States dearly.
Finally, in line with the plan adopted in July to reduce gas consumption in the EU, Brussels proposes to intensify incentive measures to reduce electricity demand, in particular by paying consumers who restrict their needs, or through tenders that grant compensation to manufacturers in exchange for a certain reduction in their consumption.
Source: BFM TV
