Brussels On Friday in Brussels, the EU energy ministers decided on a crisis package to combat high electricity prices. In it, the 27 member states commit themselves to saving electricity. They also want to skim off the excess profits of energy companies in the future and use the income to relieve consumers and companies.
“We have completed another piece of the puzzle, but it’s definitely not the last,” said Czech Energy Minister Josef Sikula, whose country holds the rotating Council presidency.
When the package was presented a few weeks ago, the EU Commission estimated that the states could take in 140 billion euros from the excess profit tax.
Since then, however, gas prices have fallen, and the excess profits of the companies and thus the state revenues will be correspondingly lower.
- Excess profit levy for electricity suppliers: The price of electricity is determined by the most expensive power plant that is used for production – currently these are mainly gas-fired power plants. However, since producers of cheaper electricity, such as solar, wind or nuclear power, also benefit from the high prices, their income is now to be capped at 180 euros per megawatt hour.
- Oil and gas companies should pay a solidarity levy of at least 33 percent of their excess profits.
- The states commit to saving five percent of their electricity consumption at peak times. This means that expensive gas-fired power plants need to be used less frequently.
In the dispute over a European gas price cap, on the other hand, the fronts remain hardened. 15 EU countries are demanding that all gas imports to Europe be capped with a price cap. Among them are France, Italy, Spain, Poland, Belgium and Greece.
They argue that not every country has as much money as Germany to offset high gas prices. Therefore, a Europe-wide solution is needed to push gas prices down.
>> Read here: All developments in the energy crisis in the news blog
However, several participants spoke out strongly against such a step, including Germany, Denmark, the Netherlands and Austria. They fear delivery problems if Europe no longer wants to pay the market price to the supplier countries.
The EU countries have not yet agreed on capping the price of gas.
(Photo: AP)
“We cannot conduct experiments on the back of security of supply,” said Austrian Energy Minister Leonore Gewessler. She has not yet seen a proposal that would ensure that enough gas would come to Europe if you stopped paying the market price. Security of supply has “top priority”.
EU Commissioner Simson plans action plan
The Estonian Energy Minister Riina Sikkut also said that security of supply comes before price. The price can be reduced through compensation payments, but first it is important to have enough gas for the winter. The best way to keep prices down is to save on electricity.
It has not yet been possible to agree on a gas price cap, said EU Energy Commissioner Kadri Simson at the subsequent press conference. Instead, the member states should now send further proposals to the Commission.
Next week Simson wants to present an action plan for further action. Several ministers called for a concrete timetable for introducing a gas price cap. The Commission must come up with a concrete proposal quickly, said the Czech Sikula. “I am prepared to call as many crisis meetings as necessary.”
Electricity price: How the skimming of excess profits could look like
According to experts, there are still many unanswered questions with regard to skimming off profits. Georg Zachmann from the Bruegel Institute in Brussels says that the infrastructure of the Renewable Energy Sources Act can probably be used in Germany. “That makes it administratively relatively easy.”
However, the problem remains that electricity is sometimes bought years in advance at different prices. Such transactions should be excluded, says Zachmann. According to Lion Hirth from the Hertie School in Berlin, this is not easy. A megawatt hour of electricity is sometimes traded several times on the futures markets.
Market interventions in wholesale are extremely complicated, says Hirth. “And there is a real danger that an instrument that can work in principle and is also possible in principle will end up doing more harm than good because of one of the many difficulties in implementation.”
“I’m rather pessimistic that it will still work this year, but optimistic that it can still work this winter if everyone pulls together,” says expert Hirth. That also depends on whether the state is willing to pre-finance relief before the money is collected.
Federal Finance Minister Christian Lindner has repeatedly emphasized that he wants to stick to the debt brake. It only allows the federal government to take out new loans to a limited extent.
In principle, the economists fear that the measures will not be sufficient. “I am relatively convinced that this will not solve the problem in its entirety and that the discussions will not be over then,” says Zachmann.
Several ministers also pushed for joint gas purchasing. Germany and France had called for this in a joint position paper, and others followed suit.
In the future, purchasing must take place via the EU platform, demanded Luxembourg’s Energy Minister Claude Turmes. The Commission cannot organize this alone, but needs the support of the large member states.
>> Read here: 12,000 euros a year: That’s how expensive it gets to heat a house with gas in winter
Turmes named Germany, France, Italy, Spain, the Netherlands and Austria. These six countries account for more than 60 percent of European gas consumption. “You have to make this platform work.”
Federal Economics Minister Robert Habeck (Greens) said gas costs had to be brought down. “There are tools that I think should be seized immediately,” he said. “This includes, for example, a purchasing group, so that we use the market power of Europe wisely on the world markets, act in a coordinated manner and thus bring prices down.”
He named the German platform THE as a role model. They organize large purchasing volumes and are now acting on the market in such a way that they no longer buy at any price. “The reservoirs are full. We are no longer in a situation that can be blackmailed.”
More: At most 15 percent more expensive and almost no taxes: This is how other countries slow down energy prices