The European Commission proposes to curb the profits of electricity companies and gas suppliers. These excess profits can be used by EU countries to financially assist their citizens in paying sky-high energy bills. An extraordinary European summit on this topic will be held at the end of this month.
Commission President Ursula von der Leyen said in her annual State of the Union address that energy companies are currently making mega-profits due to speculation on international energy markets, as Russia manipulates the supply of oil and natural gas.
She pointed out that Russia is using energy as a political weapon against European sanctions by shutting down the Nordstream 1 gas pipeline. The gas price was 40 euros per megawatt-hour in mid-last year and is now nearly ten times more expensive in 2022.
It is up to the European Energy Ministers and heads of government to decide whether to establish a price cap for the purchase of gas and electricity. They must also decide if the linkage between oil prices and gas prices will be maintained.
Energy Commissioner Kadri Simson said yesterday in a debate with the European Parliament that recent decisions by the European Union have already reduced gas demand by 10 percent. EU countries are now importing more from the United States and are conducting negotiations with Israel, Egypt, Algeria, and Azerbaijan.
Today, Simson, together with Climate Commissioner Frans Timmermans, will present the details of the emergency intervention plan to be discussed at a summit conference in Prague later this month.
An important part of this plan will be that EU countries accelerate investment in renewable energy. This can speed up the reduction of dependence on imports of both Russian energy and environmentally threatening fossil fuels.