Wednesday, October 5, 2022
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EU chief proposes electricity reform and limit benefits

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The head of the European Union presented on Wednesday a plan to limit the profits of electricity producing companies that are making extraordinary profits due to the war in Ukraine and climate change, and pointed out that the proposal could raise 140,000 million euros ( dollars) to help those affected by rising energy prices.

“These companies are making profits they never counted on, never dreamed of,” European Commission President Ursula von der Leyen told lawmakers at the European Parliament in Strasbourg, France.

“In our social market economy, profits are fine, they are good. But in these times it is a mistake to receive record windfall revenues and profits profiting from the war and at the expense of consumers. In these times, the benefits must be shared and channeled to those who need it most, ”she stated.

“Our proposal will raise more than 140 billion euros for member states to directly cushion the blow,” von der Leyen said in his State of the European Union speech in parliament.

With winter approaching, the 27 member countries are struggling to contain an energy crisis that could lead to blackouts, factory closures and a deep recession. Russia has already cut gas supplies, partially or entirely, to 13 EU countries.

Europe has also been affected by a drought that, according to experts, is the worst in 500 years.

Von der Leyen, dressed in a blue top and a yellow jacket, the national colors of Ukraine, also said that the bloc’s electricity market must be properly reformed to tackle the price crisis that affects both European companies and households.

According to the head of the EU, a “deep and broad reform of the electricity market” is needed to reduce the influence of gas on electricity prices.

Natural gas is used to keep industry running, heat homes and offices, and generate electricity.

Even before Russia began its war in Ukraine, many member states had called for a profound structural reform of the community energy market, considering that the influence of gas in setting wholesale electricity prices is disproportionate.

“The current design of the electricity market is no longer just for consumers,” said von der Leyen, who will travel to kyiv later in the day.

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