Posted Sep 30, 2022, 12:04 PMUpdated on Sep 30, 2022 at 6:09 PM
It is an important first step that the Twenty-Seven took this Friday, “but other measures are necessary” to limit the devastating impact of the energy crisis which is sweeping the Old Continent, the Commission and the ministers agreed on Friday. European Energy.
These, meeting in Brussels, managed to agree on a new regulation which should come into force in October. This text imposes a reduction in electricity consumption, following doing the same for gas in July . The idea is to reduce, even in a small proportion, the imbalance between supply and demand to prevent prices from soaring, especially at certain times of the day. A reduction in overall demand of 10% is decided on a voluntary basis.
For the hours of high consumption, a reduction of 5% is imposed, on a mandatory basis this time, between 1is December and March 31. Each Member State will be free to take the measures it deems appropriate to achieve this objective. The European Commission may bring proceedings in the event of a breach.
Nuclear, coal, renewables
Second important decision, the Member States will be able to recover part of the excess profits reaped by certain low-cost electricity producers (nuclear, coal, renewables).
The profits generated when electricity is sold at more than 180 euros per megawatt hour between 1is December and June 30 will have to be confiscated to fund consumer support measures like retail price freeze . “Member states have the option of applying a higher cap, it’s up to them to decide,” explained Czech Industry Minister Jozef Sikela.
Disputed calculations
The Commission estimates that 117 billion euros might thus be mobilized, but many doubt that such a sum will be reached, especially since the measure was modified during the negotiations. In France, this exceptional levy will yield little, because the regulations in force already allow the State to recover a large part of the “surplus profits” from nuclear and renewables, it is pointed out at the Ministry of Energy Transition.
Third measure confirmed this Friday, the Twenty-Seven will have to tax the oil companies on their European activities of production of hydrocarbons and refining. A minimum rate of 33% will apply to profits deemed excessive in 2022 (profits 20% higher than the average of the last four years).
Member States will be able to go beyond 33% if they wish. Brussels has estimated the yield of this measure at 25 billion, but this calculation is disputed. Financial analysts (RBC, Citi, etc.) expect less than 10 billion .
Convince Germany
The Twenty-Seven are now discussing measures to reduce gas and electricity prices on the wholesale markets. A cap on the price of imported gas is on the table, but it is a subject on which member states are deeply divided.
France and fourteen other countries want to cap the price of all gas arriving in the Union by pipeline, and not just Russian gas, as the Commission would like. To date, the fifteen States have not convinced Germany, nor the Commission, who fear that this will cause a reduction in the volumes of gas available for Europe.
Negotiate with Norway
The Commission prefers to call for negotiations to limit the prices of imports from trusted suppliers, such as Algeria, Norway and the United States. Germany also strongly supports this. German Economy Minister Robert Habeck says these countries should not exploit soaring prices at Europe’s expense “because in this situation we are in a partnership, and partnership cannot mean exploitation”. , he let go, leaving the Council.
To reduce the cost of liquefied natural gas, the Commission suggests concluding joint purchases. It also says it is open to capping the price of gas used for electricity production, at a level that helps to lower electricity prices without leading to an increase in gas consumption.
10% inflation
Be that as it may, the Brussels executive must formulate a proposal on the subject “before the European Council next week”, promised Kadri Simson, the European Commissioner for Energy. “We will have to go much faster, much further and make other proposals”, declared the French Minister for Energy Transition, Agnès Pannier-Runacher, in Brussels this Friday.
The energy crisis is fueling inflation, which has now reached a record 10% in the euro zone. Time is running out, while the sabotage of the Russian Nord Stream gas pipelines Russia poses additional threats to Europe’s supply chain. On Thursday, Germany announced that it was preparing to borrow 200 billion additional euros to fund its shield once morest soaring energy prices for households and businesses.