After the European Commission abandoned capping the price of natural gas imported from Russia, choosing instead to go with the idea of ​​price gouging from energy companies, the body led by Ursula von der Leyen is considering unprecedented measures to reduce demand for electricity.

Electricity – socketsPhoto: DreamsTime

According to an EC working document obtained by Euractiv, the main objective requires EU member states to:

  • “to reduce the total consumption of electricity” by households – for example, through public information campaigns or auctions of “unconsumed energy”;
  • “mandatory target of at least 5% reduction in net electricity consumption during peak hours”
  • “reduce net monthly electricity consumption by at least 10%”

To achieve this goal, EU countries are urged to consider “market-based measures such as auctions or bidding systems” that could include “financial incentives or compensation for market participants”, the draft says.

The initial reaction to these proposals was quite positive

“First of all, we need to reduce demand,” said Christian Rubi, secretary general of Eurelectric, the EU’s energy industry association. “When there’s less supply, you have to have less demand – that’s the fundamental thing,” he told Euractiv.

“Energy conservation is the key thing to do right now,” said Bram Claise of the Regulatory Assistance Project (RAP), a clean energy think tank. “This is one of the few actions that can still have an impact this winter,” he said.

Tax on large profits

If member states fail to agree on a cap on gas and oil prices, the EU executive is expected to introduce a tax on the high profits of companies that burn fossil fuels, with a separate measure to be taken on emissions-generating power producers.

Oil, gas and coal companies will have to make a “solidarity” financial contribution based on the “taxable surplus generated in fiscal year 2022,” according to a document drafted by the Commission.

The Guardian notes that Ursula von der Leyen is likely to unveil her plan to tackle rising electricity prices in the bloc on Wednesday alongside her State of the Union speech.

Photo: Dreamstime