Dear Energy, today the EU package of measures

Absent the ‘price cap’ on gas, present the levy on extra profits. Yes to the reduction of consumption during peak hours, which will have to cover a certain percentage of the hours of each month

Dear energy, the European Commission presents today in Strasbourg – on the day Ursula von der Leyen will deliver her fourth State of the Union address – the package of measures aimed at countering the rise in energy prices in view of next winter, which will then be discussed by the extraordinary Energy Council convened for next Friday, September 30, in Brussels. The package reflects the non-paper that the EU executive had presented before the Energy Council on 9 September, with the conspicuous absence of the price cap on gas, on which member countries are still divided. It will take a little more “time” for an agreement to be reached on a measure which, if not well calibrated, risks being counterproductive, as explained by the co-president of the Greens / Ale group Philippe Lamberts, because a cap only on gas Russian today would have little impact, given the reduction in imports from Moscow, while going to touch liquefied natural gas, one of the hypotheses on the table, or putting a cap on gas imported from Norway, the first supplier of the EU today, could mean ” shoot yourself in the foot “.

THE MEASUREMENTS IN THE PACKAGE – The package discussed by the Commissioners yesterday is based on some main measures. According to the draft regulation proposal, the first is a measure that “temporarily reduces” the revenues and profits of companies active in fossil fuels. Member States “will use the proceeds from the solidarity contribution to provide support to households and businesses and mitigate the effects of high energy prices”, as well as to “reduce energy consumption and support industries”.

Second, an “emergency instrument for electricity” is proposed, which sets “two objectives for reducing electricity demand”. The first objective requires states to take measures that lower “overall electricity consumption for all consumers”, even those without ‘smart’ meters, so that they moderate energy use during the day. This could be achieved through “targeted information campaigns” for consumers.

In addition, the Commission will propose a “binding” target to reduce consumption at peak hours, which will have to cover a certain percentage of the hours in each month when consumption is forecasted to peak. In practice, it is a question of “selecting 3-4 hours every day of the week” in which to reduce consumption. Member States will be able to choose these times and will be able to choose the specific provisions to be adopted, which must be “market-based”. The reduction in hourly consumption for the Commission “can lead to a reduction in gas consumption estimated at 1.2 billion cubic meters in 4 months”, according to the draft, ie “3.8%” of consumption over the same period of time.

The third measure concerns the ceiling on the revenues of energy companies that use “inframarginal technologies”, that is, outside the technical jargon, those that produce electricity from sources less expensive than gas, such as “renewables, nuclear and lignite”. The cap would be fixed ex post on revenues, calculated on the basis of the megawatt hour of electricity produced. It should be set at a level that does not jeopardize the profitability of existing plants or future investment decisions. Aid is also envisaged for families and businesses, which should be financed by the revenues from the cap to the revenues and from the levy on extra-profits. In particular, for the Commission “allowing states to extend regulated prices to SMEs during the crisis would give them another tool to manage the impact” of energy price increases.

The technical details of the measures, in particular the percentages and numerical targets, were discussed by the college yesterday and should be made official today. The legal basis for these measures, as anticipated by von der Leyen last week, is Article 122 paragraph 1 of the TFUE, which has already allowed the creation of Next Generation Eu. The package announced in the non-paper last week also contained, in addition to the price cap on gas, also measures to support the liquidity of utilities, many of which are in difficulty due to the skyrocketing prices of raw materials and margin calls on derivatives. with which they cover the risks. This matter is not dealt with in the draft regulation, but it is a subject very much to the attention of the EU institutions.