EU weighs renewables profit cap amid energy crisis

European Commission president Ursula von der Leyen has proposed capping renewable energy companies’ revenues and channelling their profits towards vulnerable households and companies amid soaring electricity prices.

European Commission president Ursula von der Leyen announced the proposals in a press conference today (7 September)  (pic credit: Thierry Monasse/Getty Images
European Commission president Ursula von der Leyen announced the proposals in a press conference today (7 September) (pic credit: Thierry Monasse/Getty Images

EU energy ministers will discuss the measure – one of five proposals to protect households and businesses – at a meeting on Friday (9 September).

Similar proposals in Germany were criticised by the country’s renewables sector, and trade body WindEurope has already warned against windfall measures being imposed on wind power companies ahead of Friday’s meeting.

The EU will also discuss measures to reduce energy demand, cap windfall profits of fossil-fuel companies and lower the price of gas, von der Leyen said in a press conference.

She explained that Russian manipulation of gas – as well as reduced hydropower output amid drought in Europe and nuclear fleet shortfalls – were reducing energy supply and driving up prices.

“We will propose a cap on the revenue of companies that are producing electricity with low costs,” she said. “The low-carbon energy companies are making in these times – because they have low costs, but there are high prices in the market – enormous revenues they never calculated with, never dreamt of and cannot re-invest as far. These revenues do not reflect their production costs.

“So it is time to benefit from the low costs of low-carbon sources like renewables. We will propose to rechannel these unexpected profits to the member states, so that the member states can support vulnerable households and companies.”

Precise details of the proposal have not been made public.

Von der Leyen added that the EU has already moved to reduce energy demand across the bloc, increase gas storage ahead of winter and diversify away from Russian fossil fuels. It has also unveiled its €300 billion RepowerEU plan, which includes measures to slash permitting times for renewable energy projects.

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