EU: Energy Ministers Agree on Measures to Mitigate High Electricity Prices
Brussels – EU energy ministers have reached a deal on new measures to mitigate high electricity prices, the Czech Presidency of the EU Council said on Friday.
“Ministers reached a political agreement on measures to mitigate high electricity prices: mandatory electricity demand reduction, cap on market revenues from inframarginal electricity producers and solidarity contribution from fossil fuels producers,” the Czech presidency wrote on Twitter.
In this regard, the European Council published later a statement highlighting measures to mitigate electricity prices.
First, the Council agreed to voluntarily reduce gross electricity consumption by 10%, while a mandatory reduction target of 5% will be applied during peak hours, the statement said, adding that EU member states will determine 10% of their peak hours between December 2022 and March 2023 during which they will reduce demand.
“The Council agreed to cap the market revenues at 180 euros/MWh [$175] for electricity generators, including intermediaries, that use so-called inframarginal technologies to produce electricity, such as renewables, nuclear and lignite,” the statement added.
EU member states also agreed to establish a mandatory temporary solidarity contribution on the profits of enterprises operating in the sectors of oil, gas, and coal.
“The solidarity contribution would be calculated on taxable profits, as determined under national tax rules in the fiscal year starting in 2022 and/or in 2023, which are above a 20% increase of the average yearly taxable profits since 2018,” the statement read.
In addition, the EU decided that countries may temporarily set an electricity price for small and medium-sized enterprises to further support them amid the energy crisis.
“The measures are temporary and extraordinary in nature. They will apply from 1 December 2022 to 31 December 2023. The reduction targets of energy consumption shall apply until 31 March 2023. The mandatory cap on market revenues shall apply until 30 June 2023,” the statement said, adding that specific exemptions for Cyprus and Malta were also introduced.
These measures will be formally adopted in writing in early October. Later, they will be published in the Official Journal of the EU and enter into force the following day.