Today our energy minister Robert Habeck (52, Greens) is in Brussels – for an expensive summit. With angry EU colleagues!
On the agenda: urgent measures against high energy prices. Ideas such as price caps, cutting profits in any way and forcing people to conserve electricity are debatable.
Against the background of the war in Ukraine, the EU Commission has several plans on how to free consumers and companies from high energy costs.
EU shakes head over German electricity policy
For Habeck, the date is tricky because there is so little understanding in the EU why Germany is shutting down its last nuclear power plants (in two “emergency” modes) — now, in the midst of an electricity crisis, when every megawatt hour is urgently needed. As a reminder: according to the EU, nuclear energy is a “green” technology – only in Germany, of all places, it is not accepted by the greens.
Who will help with electricity supply if the worst comes to Germany? noise WELT So far, only two EU neighbors have agreed to solidarity treaties: Denmark and Austria. Gas-producing neighbors Belgium and the Netherlands are dangerously cool to the idea, as is Poland. Negotiations are ongoing with the Czech Republic and Italy, which are also stalling.
Is there an EU-wide “excess profits” tax?
Habeck’s idea of reining in the excess profits of electricity producers and redistributing money to consumers is not a bad one. Some countries already have their own version of such an “excess profits tax”.
Just to remind you what it’s all about: energy producers who generate cheap electricity from wind, solar or nuclear are lining their pockets well. They sell their electricity at a very expensive price without buying the expensive gas first.
Because this is how the electricity market works: the most expensive power plant to operate to produce electricity sets the price. If there is insufficient supply or low demand, the system works well because wind power, for example, is a cheap source of electricity. Currently, however, expensive gas-fired power plants must be used to meet demand – and the price depends on them.
▶︎ EU-wide “excess profits” tax: A portion of these “opportunity profits” of cheap electricity producers can now be reduced and used to reduce the burden on consumers. The EU Commission has proposed to introduce a cap on the revenues of companies that produce electricity from cheaper sources than gas such as wind, solar, nuclear or coal.
Anything beyond this maximum price must be reduced by the state and redistributed to consumers – similar to an excess profits tax. The proposals are similar to those of the central government.
According to a first draft of the European law made available to the German press agency, the revenue threshold could be set at 200 euros per megawatt hour. That would be half the current electricity price on the German wholesale market, which was recently around 440 euros per megawatt hour.
These reliefs may also come
▶︎ Save energy suppliers from bankruptcy: Due to large fluctuations in prices and uncertainty in the markets, energy companies, some of which do business prematurely, may face payment problems. The EU Commission therefore wants to support energy suppliers and reform EU state aid rules so that state aid can be granted more quickly in an emergency. This, too, met with some objections, diplomats said.
▶︎ Price Range for Russian Gas: In order to reduce Russian revenues, the EU Commission proposes to buy Russian gas only if it does not exceed a certain price. However, diplomatic sources said many countries have concerns. Russian President Vladimir Putin (69) has threatened to give the European Union nothing on gas price caps. Countries like Hungary still rely heavily on Russian goods. Overall, Russian gas accounts for nine percent of EU gas imports, compared with 40 percent at the start of the war, according to EU figures.
▶︎ Unity Tax for Oil and Gas Companies: In addition, Commission President Ursula von der Leyen (63) wants to look at the balance sheets of the most profitable oil and gas companies. For example, they may be obliged to pay some kind of solidarity contribution. “All energy sources must contribute to overcoming this crisis,” van der Leyen says, without elaborating.
▶︎ Power Saving Obligation: As a further measure, van der Leyen proposes a binding target of reducing power consumption during peak hours. At this time, electricity is especially expensive because the expensive gas market is used during peak demand for generation. As per the draft, the bond target may be fixed at five percent. According to diplomats, there is plenty of incentive for energy-saving measures.
Then when will it be cheaper?
One possibility for how things might proceed after the summit: If ministers can agree on a common direction, the EU Commission wants to make concrete legislative proposals on Tuesday. EU countries must agree to this. If countries do not agree, there may be European patchwork measures.
The central government has already announced that it will impose a revenue cap on power companies themselves if work does not happen quickly at the EU level. until properly opened.
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