The European Commission is proposing a mandatory reduction in electricity use during peak hours as part of sweeping new measures to tackle the energy crisis.
Other measures include a price cap on energy companies who produce electricity through low carbon methods – such as renewables – but who have availed of artificially high revenues because of the price of gas, and a windfall tax on fossil fuel companies.
Commission President Ursula von der Leyen told reporters: “We have to save electricity, but we have to save it in a smart way.
“If you look at the costs of electricity there are peak demands, and this is what is expensive, because in these peak demands expensive gas comes into the market.
“So what we have to do is flatten the curve and avoid peak demands. We will propose a mandatory target for reducing electricity use at peak hours and we will work very closely with member states to achieve this.”
EU energy ministers will discuss the proposals at an emergency meeting in Brussels on Friday.
Ms von der Leyen also told reporters that a price cap would be imposed on the revenues of companies “producing electricity with low costs”.
She said “low carbon energy sources” were enjoying low costs but high prices on the market.
This meant they were making revenues they had “never dreamt up”.
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She said such “unexpected profits” would be channelled to member states to support vulnerable households and companies.
President von der Leyen argued that such revenues could not be reinvested by low carbon energy producers because they did not reflect the costs of production.
“So it is now time for the consumers to benefit from the low costs of low carbon sources. Like, for example, renewables,” she said.
She said there would also be a “solidarity contribution” from oil and gas companies which had made “massive profits”.
President von der Leyen said “all energy sources must help to overcome this crisis”.
“Member states should invest these revenues to…support vulnerable households and vulnerable companies, but also to invest them in clean homegrown energy sources.”
The Commission is also proposing liquidity support for energy utility companies to ensure their ability to trade but also to ensure the future stability of the energy market.
The final proposal will be a price cut on Russian gas.
Ms von der Leyen said that while sanctions were “grinding deeply” into the Russian economy, it was being buffered by high fossil fuel revenues.
“We must cut Russia’s revenues which Putin uses to finance this atrocious war in Ukraine,” she said.
She added that the EU had reduced its dependence on Russian gas from 40% at the beginning of the war to 9% today.
“Over the last six months during this war we have very much increased our preparedness and we have weakened the grip that Russia has on our economy and our continent.
“We have stopped Russian coal…, we are winding down Russian oil, and we’ve been working very hard to diversify away from Russia towards other reliable suppliers, like the United States or Norway, Azerbaijan, Algeria and others.
“Actually today, Norway is delivering more gas to the European Union than Russia.”