The proposed levies, to be discussed by EU energy ministers on Friday, would target fossil fuel and low-carbon power producers that have made extra profits thanks to artificially inflated electricity prices, according to people familiar with the plan. They will then seek to channel the proceeds to vulnerable consumers and households. Wholesale electricity prices have skyrocketed because they are tied to the price of natural gas, whether the electricity is generated by natural gas or other means. Gas prices are about 12 times higher than a year ago. Von der Leyen said in prepared remarks that national levies would be part of proposals that also seek to reduce electricity use by shifting demand away from peak periods. Brussels will also work with member states to ensure that electricity producers have sufficient liquidity. The Commission’s plans would also include a price cap on Russian pipeline gas, designed to limit President Vladimir Putin’s gains from his “fearless war against Ukraine,” according to von der Leyen’s remarks. Russia announced on Monday that state gas supplier Gazprom will cut supplies through the Nord Stream 1 pipeline until Western sanctions are lifted. “This is a cynical game by Putin and for us a test of unity and solidarity,” von der Leyen said, suggesting the EU was in a stronger position to take a hard line given its efforts this year to diversify supplies from Russia. “It is almost impossible for Russia to find new customers for pipeline gas in the short term.” The national windfall levies will be applied to profits collected by energy companies that do not rely on natural gas to generate power, such as wind farms and nuclear plants. Member States have not yet endorsed the proposals. The Commission is also backing levies on oil and gas producers that have enjoyed record profits as it tries to show that it is not just low-carbon energy producers that need to help ease the crisis. The Commission proposes to reduce electricity consumption during peak hours by shifting industrial processes to off-peak times such as weekends and nights. This will be on top of a voluntary program to curb gas demand by 15 percent, which member states agreed to in the summer. Von der Leyen also wants the EU to help utilities struggling with “Putin-manipulated market volatility”, saying Brussels will work with member states to ensure sufficient liquidity in the sector. As part of this, officials said the Commission would temporarily amend the state aid framework to speed up requests from EU capitals to support their utilities. The Commission has previously relaxed state aid rules for companies suffering during Covid-19 lockdowns and the ripple effects of the war in Ukraine. The Commission is also considering changes to trading rules in energy markets. Kristian Ruby, secretary general of Eurelectric, the trade body for the European electricity industry, said regulators needed to “expand the list of assets that will [be] eligible as collateral’ to accept assets other than cash and prepare to ‘avoid a domino effect’, as well as extending credit lines to companies in crisis. Additional reporting by Javier Espinoza in Brussels
